How we stand...
With the Bank of England Base Rate still at an all time low many people have been content to allow their mortgage to revert to, and remain at, their lender’s standard variable rate (SVR). However, recent SVR increases by major lenders have triggered a realisation that unless your mortgage is on a tracker or fixed rate you are now at the mercy of your lender when it comes to your future mortgage payments.
When considering whether or not to remortgage there are a number of factors that you should consider. Firstly, you should make sure that your present mortgage does not have any early redemption penalties (ERP)as paying such a penalty is likely to negate any benefit that you may obtain from remortgaging. Once you have established that no ERP applies, you should then consider whether you wish to have the security of knowing exactly what your mortgage payments will be for a specific period (fixed rate mortgage) or whether you are prepared to risk an increase in your mortgage payments in accordance with changing economic conditions (tracker or discount rate mortgage). Tracker or discounted rates tend to be slightly lower at outset than fixed rates – so you might decide to go for a hybrid version that allows you to switch to a fixed rate in the future without incurring any redemption penalties.
You also need to consider the impact that fees and charges will have. Many lenders will offer incentives for switching your mortgage to them, such as free valuation and legal fees paid on your behalf.
However, most lenders will charge an arrangement fee that is added to your loan on completion. This needs to be taken into account when making repayment comparisons with your present lender. Of course, your current lender may also be offering an alternative product (with or without an arrangement fee) and it makes sense to see what they are prepared to offer you and then compare this to the rates available in the open market before making the decision to remortgage.
If you do not have a perfect recent credit profile, do not despair! We also have access to lenders who are prepared to consider people with late payment history, defaults and/or CCJs. However, please be aware that you will need a deposit of between 15% and 25% of the purchase price, depending on the severity of your adverse credit, and the interest rates charged are likely to be higher. A representative APR for Adverse Credit mortgages is 6% as at 10th November 2015.
How we can help.
Our mortgage review service will evaluate all of these options and provide you with a written report that sets out the choices available to you and our recommendations based upon your particular requirements, objectives and circumstances.
Please call us to discuss your requirements or complete the enquiry form and we will contact you.