Residential Remortgage Update June 2017 – Mortgage Guardian
Residential Remortgage Update June 2017
It always surprises me why residential remortgage applications are lower than they ought to be. It is difficult to put an exact figure on it but there is an estimate that millions of homeowners are still on the Standard Variable Rate (SVR) with their mortgage lender. It is a figure I can believe but you are lining the pockets of the mortgage lenders truth be told!
It depends on the size of your mortgage but we are not talking a small saving by remortgaging – We could be looking at hundreds of pounds that you could be unnecessarily overpaying each month which can run into the thousands over the year!
What Can I do about it?
The obvious solution is for us to look at your current situation to see whether to remortgage you to another mortgage lender would be best advice. It is usually free to remortgage for residential remortgages. This means that the following is free:
- No Broker Fee – I get paid by the mortgage lender!
- Free Property Valuation
- Free legals
It just takes a bit of your time to go through the mortgage application process but don’t worry because I am here to offer you a service.
Even if you do not want to borrow more money it makes sense to get into a lower rate and even perhaps consider one of the many attractive fixed rates available on a residential remortgage.
Standard Variable Rate (SVR)
Just so you know……it is undesirable to be on the Standard Variable Rate (SVR) for most people because you will be paying more per month in interest than necessary. Just to put it into perspective, I helped a normal family remortgage recently and their mortgage payments almost halved. That’s right! That is an extra £350 per month in their pocket per month rather than in the lenders coffers. The £350 that they now save per month is a massive amount for this family and their circumstances will be similar to many people who are on the SVR. Once again……over £4000 per year saved.
Popularity of Fixed Rates
The family took the opportunity to review their finances and decided that a fixed rate for 5 years would be the best solution for them. I am always weary of deals exceeding 2 to 3 years as people’s circumstances can change considerably over this period but we are seeing a significant rise in 5 year fixed rate deals. In this case the family seemed certain that the pros of the 5 year fixed rate outweighed the cons. In this instance, the family thought that they could not get another mortgage as the main bread winner had gone self-employed since taking out the mortgage and thought they would not fit the criteria. They could not have been more wrong as they did get the mortgage.
Interest Rate Rise
The Bank of England announced last week that interest rates will remain unchanged at 0.25% but 3 policymakers voted for an increase in interest rates which is the closest we have come to a rate increase since 2007. Many people widely believe that interest rates are unlikely to go down which means that there is a chance of an increase hence the popularity of fixed rates at the moment. It means people know how much they will be paying each month for the next 2, 3 or 5 years. Brexit has caused people to feel insecure.
The three main reasons why people are not switching lenders is because:
- Mortgage borrowers do not realise they can remortgage away to another lender! Give me a call and I shall walk you through it!
- People are just too busy! This is one of the reasons I am telephone and online based. It is more convenient for you and I am happy to speak out of hours if it helps.
- There is a misconception among many people that they do not qualify for a mortgage. Even if you think this then give me a call. There are over 130 different mortgage lenders available all catering for the many different needs of their customer.
Even saving £100 to £150 per month must be worth a bit of effort to pick up the phone.
Please also read our section on reasons to remortgage your home.
The best advice I can give at this stage is to find your mortgage paperwork and send over to me via email and I shall have a look and tell you what I can do for you. It makes sense
Get The Most Suitable Residential Remortgage For Your Circumstances!