For most people a mortgage is their biggest financial commitment and it makes sense to reduce that cost wherever possible. At present mortgage interest rates are at an all time low, even the standard variable rate (SVR), which most mortgages revert to after the initial discounted offer are at very low levels.
Compare Remortgage Quotes
For first time buyers it’s a particularly tough time to get a good mortgage deal but for those who already have a mortgage and have an excellent credit score, it’s definitely a good time to compare some remortgage quotes from an independent mortgage broker. Despite the current low levels of interest it may still be possible to save money on a new remortgage deal. For those who are still using an endowment insurance policy to repay their mortgage it is a particularly good time to check out a new deal.
However Martin Lewis, one of the UK's most respected financial journalists makes the point, “Before you go anywhere, challenge your current lender to give you a new offer. Remember, it makes money from your debt so it does want your custom.”
Compare Remortgage Deals
It’s important to add a note of caution at this stage. Borrowers must make sure that when comparing remortgage deals they compare like for like or get a professional independent mortgage broker to work out, over the term of the mortgage, the savings to be made.
There are a number of charges that may be applicable on new mortgages and must be added to the equation. For example:
- Exit fee on current mortgage
- Early repayment fee on current mortgage
- Arrangement fee on new mortgage
- Legal fee
- House valuation fee
To show an example of some of the fees a mortgage company might levy the following example comes from ING DIRECT (22/1/10). Other lender’s charges will vary.
- Product fee of £595 (non-refundable) includes £195 booking fee upon a full application
- Early repayment charge 3% of loan in first 12 months, 2% for the remaining fixed rate period
Where to Find the Best Remortgage Rate?
An Internet search for the best remortgage rate will inevitably reveal hundreds of companies offering what they claim is the lowest remortgage quote. However borrowers should be aware that most of these companies will only be offering their own financial products and therefore don’t make any comparison with the products offered by their competitors.
Independent Mortgage Broker
So borrowers looking for the best remortgage rate should take the time to research the market thoroughly, perhaps starting with one of the price comparison sites or asking an independent mortgage broker to do the work for them.
If using a mortgage broker it’s important to ask the question, “Are you an independent mortgage broker with access to whole of market,” which means does that broker have access to all remortgage deals that are on offer.
This article is compiled using journalistic research and is not intended as financial advice.
Sources:
Martin Lewis, Guide to Remortgage, MoneySavingExpert. Com, website access 22/01/10
Uswitch.com, Mortgages - uswitch top deals, website accessed 22/1/10
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