Remortgaging: why remortgage?

To Save Money!

Remortgaging is primarily done to save money and to a lesser extent to improve flexibility due to changes in the borrowers personal circumstances. Saving money’s reasoning  is obvious, unless you like paying a premium for your borrowings!

Changes in circumstances are another common reason to remortgage. Imagine, for example you have changed jobs from a steady monthly wage to consultancy work, your income is not necessarily monthly. Whilst a fixed rate regular monthly payment mortgage might be cheaper on rates, your wage is not necessarily monthly anymore. As such a flexible product might be more sensible choice, allowing you to make overpayments one month and skip payments the next without charge.

Remortgaging will usually involve changing lenders although it is possible to remortgage through your current lender. If you remortgage through your current lender by simply changing the mortgage product this is often referred to as ‘switching’. The best deals are usually found from new lenders as their products will be positioned to snatch business from expiring mortgage products.

Remortgaging is often seen as a jungle of paperwork and headaches but it needn’t be, mortgage brokers are just as happy to help with remortgages as they are Mortgages. Having a mortgage broker can make the process a lot simpler; instead of crawling through some 4,000 products a mortgage broker can return a handful of the best suited deals to your circumstances and provide guidance as to what the benefits of each product are.

Why remortgaging is for everyone

Because saving money is for everyone (sanity restrictions apply)! If you have stuck with your mortgage provider, waiting to have your loyalty rewarded, you are waiting for February the 31st.

Once your agreed rate term is over you will be chucked into the mortgage lenders Standard Variable Rate bin where you can enjoy subsidising their new business to the tune of around 2% !

Call a mortgage broker right now and find out what options are available to you; why not be the one receiving the subsidy, not paying it!

Get into the remortgaging habit

Don’t just do it the once! Every time you remortgage, put a note in your diary 3 months before the end of the agreed rate period and call your broker! If you need a little motivation, this should do the trick:

on an interest only mortgage of £150,000 if you switch and save 2%, that’s a £3,000 ; we need not tell you what you could save over 25 years! Second home anyone?

News

Nationwide Offers First Time Buyers a Discount

Friday 16th October
The nationwide today has stepped forward with 2 new offers to help open up the market for first time buyers.

The offers are as follows; a £500 discount off any reservation fee’s or a £250 discount off reservation fee’s and no legal’s to pay.

The offers are available on The Nationwide’s 3, 4 and 5 year fixed rate deals and also on its 3 year tracker deal.

Mortgage director at Nationwide, Andy McQueen, said: "We are reducing the amount that [first time buyers] need to pay upfront and so hope we've removed a barrier which may have prevented people from buying a home ."

The move will be welcomed, however the true barrier to first time buyers at the moment is the excessive deposit amounts required by all major lending institutes, making a £500 discount as practically useful as a £5 reduction for most.

Coalition to Fight Stamp Duty Formed

Friday 16th October
The National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents have formed a coalition named “1808 Coalition” after the date Stamp Duty was introduced.

The two groups and of course the coalition they form, believe the reinstallation of Stamp Duty at its normal levels will be detrimental to First Time Buyers and Buy to Let Investors.

Stamp duty, which is normally in place for transactions on residential property above £125,000 in value has for some time sat at £175,000 in a bid to re-light the fire under the housing market, however it is due to return to 125,000 on December 31st this year.

Stamp duty is applied to the total sum paid in consideration for a property where that sum exceeds the threshold. For example on a property transaction of £190,000, £1,900 is due in stamp duty (1%), not as many believe 1% of the sum exceeding the threshold i.e. £15,000 (£190,000 - £175,000) or £150 in stamp duty.

Chief executive of the NAEA, Peter Bolton-King, said: "Stamp duty is a barrier to entry for many first-time buyers and is also prohibitive for those looking for a step up the property ladder . The time has come to re-assess Britain's most unpopular tax."

Whilst we cannot agree that it its the most unpopular tax (recent surveys show 31% of respondents take the most displeasure in paying inheritance tax, compared to a mere 23% loathing Stamp Duty) however we support their call for an extension to the raised threshold as in the current market conditions, all stops should be pulled in efforts to draw in first time buyers, life blood, into the market.