Remortgaging can be a scary word to some and for others, it can make you get a little nervous, especially when you think of the money involved with mortgages.
The time for us to remortgage has come and for the first time ever, we decided to do it ourselves. Mortgage rates are at a real low currently and lots of people are taking advantage of this to save themselves some money in the next few years. Personally, I like to lock in a rate for a while, just so I know we will be able to overpay the same amount for a set period. Doing it this way also means our budget is steady for a while.
Previously when we decided to remortgage, at the end of our last term, we moved away from an interest-only mortgage to a repayment mortgage. This was something we did not feel comfortable doing, so we used an independent mortgage advisor to help us do that. If your looking to move your mortgage or remortgage and are unsure what to do, don’t panic. You are able to reach out to a mortgage advisor for help, there will be a small charge for this, however, for peace of mind it is worth it.
Now back to our mortgage, we have been with Natwest for almost 5 years. At the time the rate was good at 3.25% and we were going through an uncertain period at work, so we tied ourselves into a deal to see us through that period and give us a little consistency. Looking back now, we could have saved money with the drop-in rate over the period we had our deal, but that is just not for us. I am a creature of habit and comfort when it comes to money!
So, now we are back at the point of looking at remortgaging, and this time we are going to go alone with it. This is simply because I have done a little research into deals and I think the rates currently offered by our current provider are pretty competitive. If you are at the same point we are or are fast approaching this period, here are the options you have.
Remortgaging with your current provider
This is the option we are taking.
When it is time for you to remortgage, you should be advised by your mortgage company that you are moving onto a standard variable rate at the end of your term. At this point, you are free to start looking around at deals both with your provider and other providers.
Before you make any decision on what you want to do, have a look around at the rates you are able to get. This will help you decided whether it is worth sticking around or you want to put in a little effort to move.
We decided to stay with our current provider for a few reasons. Firstly, they were competitive in rates to our other options, this pretty much made it a no-brainer.
The biggest draw for me though, it was so simple. Because we are already with them, there is no need to get 6 months’ worth of payslips, declaring all outgoings, and having to prove the value of our home. We just needed to pick the deal we wanted and sign through the process. Then at the end of our deal in September, we will move on to the new deal we agreed.
If you decide to stick with your current provider, you can do this on your own online, over the phone with an advisor, or through a mortgage advisor. The choice for this is yours.
Remortgage with a new provider
If your current provider is not offering you the best deal or customer service, you could look to switch to another provider.
Personally, if you are looking to do this, I would consider getting advice from a mortgage advisor. Simply because you want to make the transition into the new provider as smooth as possible. It is possible to do this on your own, but with so many hoops to jump through and so much at stake, why risk making a difficult decision even tougher?
When you are looking to move, make sure you take into account any fees that may be incurred for the new mortgage. Most of the time the better rate outweighs this, but just double-check.
Move on to an SVR (Standard variable rate)
This is pretty much your last option, after your current deal comes to an end, you could just move onto the SVR offered by your provider. This may be an option for you should you be looking to sell up and not purchase again in the coming months or are looking at other options, however, it is not the best option for those who will be remortgaging.
Firstly, it is usually the more expensive option as the rate is tracked from the Bank of England base rate so it can fluctuate depending on what is going on in the country. Due to this, you have no security on the mortgage rates at all. If you are planning on clearing your mortgage, it will make it difficult to plan the repayments/overpayments and terms this way.
When it comes to your mortgage, you do not really want to be messing around with the deals you get. If you are comfortable in doing it yourself, then do so. For those less confident, there is no shame in getting some advice from your mortgage provider or an independent mortgage advisor.
You need to make the right decision for you that does not put you in financial hardship or at a place where you are unable to pay it back in the future. You get a window of time before your deal comes to an end, so use this time wisely to start looking at the best option for you.
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