Remortgaging

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The numbers of people remortgaging or moving their mortgage to another lender when borrowing extra money or simply to find a better deal has been steadily rising over the last few years and with good reason. In the current market where interest rates rose in 2008 but since have dramatically fallen and where there are fewer lenders, many of whom are more reluctant to lend, getting independent advice has become vitally important to help find the very best offers available.

Today people who remortgage make up more than one in three mortgages.

Costs

When you remortgage, your new lender will have to survey your property to make sure its value and condition are satisfactory. In addition you will need to instruct a solicitor to carry out the legal work or conveyancing. This, together with any arrangement fees, can add up to £600-£1,500 or more and you may also have to pay a redemption penalty to your existing mortgage company to release you. The good news is that some lenders offer free surveys, no application fees or cashbacks as part of their deals, to help reduce the cost of moving your mortgage.

Areas to consider

  • Don't forget to talk to your existing lender too. They may be able to offer you an alternative deal to prevent losing you to a competitor.
  • Cost out the various deals and compare them. Include administration fees and survey fees if applicable. What might appear to be a fantastic introductory interest rate could actually work out more expensive when the other factors are taken into account.
  • Look at the long term basic interest rate that the new lender will charge you once your introductory deal has finished together with any redemption penalties that might be imposed especially those that might apply after the introductory offer has finished. You could be paying dearly for your 'special deal'
  • Have a good look at what is available before making your decision.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.