Remortgaging your house is potentially one of the best financial decisions you can make. Banks and building societies take advantage of existing customers who are happy to stay on the more expensive Standard Variable Rates. However lending institutions know that a small (but growing) percentage of homeowners are looking for the best mortgage deal. Therefore to these borrowers, who go to the trouble of looking to change their mortgage deal, banks will offer special attractive mortgage deals to either keep customers or tempt them from another building society.
The problem with getting a remortgage is that it is potentially confusing and almost bewildering. There seems to be as ever growing array of mortgage deals, with many different types such as tracker, fixed and flexible mortgages. In order to make the most profitable decision it is worth checking out remortgage quotes from various sources. In addition it may be worth taking the advice of a mortgage dealer. Remortgaging advice is governed by the FSA and as a consequence the mortgage broker is required to give impartial advice. They can give quotes but they can’t recommend a particular mortgage. That is for you to decide. In addition the mortgage agent should tell you if he working for a particular company and is limited in the range of quotes he could advise on.
When looking through the different quotes it is important to consider the implications of both different interest rates and any charges and fees associated with both leaving your existing mortgage and taking on a new mortgage. For example if you were on a standard variable rate of 7% on a 30 year £200.000 mortgage. You would be paying £1,343 on a repayment mortgage. If you were able to switch to a discounted variable rate of 5% your monthly payments would fall by £258 a month. Over the course of 30 years you could save an amazing £80,000. Even if there were costs of £2,000 in Remortgaging then it will still have been worth moving after only 4 months. This case is a particularly good example of a remortgage. But there are several cases like this where you could save upto £200 a month through finding the best remortgage quote. If your mortgage term is for a shorter period e. g. 15 or 20 years left the fees associated with Remortgaging become increasingly more important. For shorter term mortgages it is more important to get low fee remortgage rather than concentrating on the maximum reduction in interest rates.
The second big advantage of Remortgaging in the UK is that it enables homeowners to consolidate their debts in one place; often with the best interest rate for borrowing For example if you were borrowing £4,000 on a credit card you could be paying a monthly interest of 17%. If you were able to remortgage and get a bigger loan on the value of your house you could use this equity from your house to pay off your credit card debt. This means your annual interest payments on this loan would fall from £680 (17%) a year to £200 (at 5%) This kind of remortgage is often known as debt consolidation and has become popular in the UK because of rising house prices. Rising house prices mean the house is worth more than the existing loan. Therefore building societies are willing to give you a bigger mortgage leaving you equity to spend or as in this case you can use it to pay off higher interest paying loans. When considering remortgage quotes it is important to consider implications such as these
More information at: http://www.ukremortgage-quotes.co.uk/
R. Pettinger studied economics at Oxford University and now writes on the UK housing market and UK mortgages. He edits a site about UK remortgage Quotes