Dont Delay Remortgage Today

Remortgaging is an increasing concern for many homeowners. The recent plunge in the world markets has lead to a rapid increase in the cost of borrowing and thousands of fixed mortgages are coming to an end this year. The key according to the experts is to act quickly.

Many people are looking to remortgage as soon as possible in a bid to secure competitive deals. Figures from Spicehaart Financial Services reveal that in February alone 34.5% consumers chose to remortgage, 43% more than in March 2007.
But thousands of people who took out fixed rate mortgages five years ago are facing a shock. When they signed up to the deals the highest Standard Variable Rates (SVR) were around 5.9%. “Any illustration would have shown an increase in the mortgage payment or 19%, based on a loan of £150,000,” explains Peter O’Donovan Mortgage Advisor at Bestinvest. “Unfortunately the highest SVRs are now around 7.25% increasing the payment by 35% to over £1,000, based on a 25 year repayment mortgage of £150,000.” However he says these homeowners will only pay the highest rates if they do nothing about it.


Lee Jacobs Chairman of Mortgage Monitor agrees: “Every day you stay with your lender paying the new higher rate is costing you money. It takes time to agree a new mortgage and if you delay it may cost you the best rate.”

The question is where to go? According to research carried out by Mortgage Monitor many people have no idea where to find the best deal when remortgaging. Its latest research found that 17% of those questioned said they will simply stick with their existing lender, which could mean they will end up with uncompetitive deals. 40% said they will use a broker who could be biased towards particular lenders. 11% said they would ask people they know to recommend a good deal.

“There is plenty of help around not least from the existing lender,” says Bestinvest’s Peter O’Donovan. “Mortgage companies, whether banks or building societies, are more proactive in keeping existing borrowers as they have discovered that it is less costly to keep an old borrower than pursue new ones. Existing borrowers now have a track record and are therefore even more important as the risk of default reduces.”

Lee Jacobs however advises homeowners to look at the whole picture and not just at the advertised rate. “Although 4.9% may look attractive, you need to look at the total cost of a mortgage over a lifetime, including arrangement fees, lawyers, surveyors, exit fees etc.” He warns: “Watch out for penalties and tie-ins. A mortgage is a contract. If you break the rules, it will cost you.” He suggests using an FSA approved adviser that will analyse the whole market.

So don’t panic there is plenty of help out there. Although the current financial market may look gloomy there are still good deals around. But it is vital to act quickly, as offers are changing and being withdrawn by the day, and even the hour. “The amount of information now available for borrowers who wish to research themselves is considerably more and better quality as more websites provide sourcing systems,” says Peter O’ Donovan of Bestinvest. “Overall there is a lot of assistance out there and whilst people will be facing an increase in their mortgage payments there is plenty of resource available to ensure the increase is as small as possible.”

By: CaroleBayliss

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Carole is an author of several articles pertaining to Mortgages, Insurance, Debts, Credit, Loans, Life Insurance, Bike Insurance, Van Insurance, Health Insurance, Remortgaging, Refinancing and other Business and Finance related articles.

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