The answer will depend on your circumstances and the time you’ve got free to make it happen. Below, we’ll give you some guidance to help you decide which way to go.
But one thing’s for sure. If you’ve got a mortgage on your home right now, it’s worth considering remortgaging.
Strong reasons could be:
- You’ve equity in your property
- You’re not locked into a fixed deal
- You’re nearing the end of your term
- You’re on your lender’s standard variable rate (SVR)
(SVR is the default rate most fixes and trackers revert to when the introductory deal finishes.)
Why a Mortgage Adviser?
Firstly, because the chances of an interest rate rise look likely by or before 2018. By then, the Bank of England is predicted to begin withdrawing some of the emergency support it has injected into the economy following last year’s Brexit vote.
Secondly, because interest rates are, for now, at a historic low of 0.25%.
Thirdly, because the remortgaging deals available are better than they have been for more than a decade.
Remortgaging Deals Best Ever
For most of us, our mortgage is our biggest expenditure. So slashing its cost is likely to be your biggest money saver.
The benefits of remortgaging, for most people, right now are high. There’s fierce competition between lenders. Many are offering remortgaging products at rock-bottom rates to encourage people to switch.
More than £35 billion worth of mortgages are due to mature in the next two months. This is the biggest period of home loan maturities in five years according to specialist data firm CACI.
Approximately £17 billion worth of mortgages are due to mature in September and £18 billion in October. So borrowers are being warned to take action and not to slip onto the SVR by just doing nothing.
DIY or Mortgage Advisor?
So how do you go about it? If you choose your own mortgage without advice it’s called an ‘execution-only’ application.
First, get your facts straight and get yourself remortgage-ready. We’ve prepared a detailed remortgaging 10-point checklist you can use here.
Comparing remortgages online is a place to start to get a general understanding of the market. But the detail can be befuddling.
There’s been a big rise in brokered remortgages in the last three years following the introduction of the Financial Conduct Authority’s Mortgage Market Review in April 2014.
This means lenders now have to ask much more detailed questions of borrowers. Now everything from your childcare to your travel costs to your pension contributions has to be considered to assess affordability.
In most cases, we think it’s worth tapping into the services of a remortgage adviser to get the best deal.
But be aware there are three varieties of remortgage advisor:
- Some only deal with a specific leader
- Some will offer you deals from a limited list of lenders, and
- Others will be independent and cover the whole market
Obviously, in terms of the choice of loans available to you, a lender that is whole of market will have access to more options for you.
Nothing comes for free. Remortgage brokers may well charge you for their services. This will be either with an up-front fee or a % of your remortgage. Others won’t charge you. But they’ll get a commission from the lender (and that sum will be built into the product).
So ask the question. Remortgage advisors should tell you up-front how much their services will cost you or if they’re paid commission.
So yes, you’ll probably have to pay a fee, either direct or have this added to your remortgage. But overall, you’re likely to save thousands.
Top Reasons to use an Advisor for Your Mortgage
1..You’re protected because they have a ‘duty of care’ to you.
Getting advice, rather than doing research on your own, means that if the mortgage turns out to be unsuitable for you later on, you’ll have more rights when you make a complaint. If their advice is not fit for purpose, you be compensated.
2. You’ll get the right product for you.
A remortgage adviser, sometimes called an independent remortgage broker, is a specialist with in-depth knowledge of the market. Not using one could mean your stuck with the wrong mortgage for your circumstances. This could be an expensive mistake you’re stuck with.
3. You’ll save time on research and wasted applications.
Remortgage advisors will look at a range of mortgage products that are right for you. So you’ll avoid being rejected by your chosen lenders because you didn’t understand the terms and conditions. They often do all the paperwork for you too, so your application will get put through faster.
4. You’ll get a product you can genuinely afford.
Remortgage advisors are obliged to carry out the proper checks and go through your finances to make sure you can afford a mortgage. They will only recommend remortgage products that are suitable for you. they’ll also explain all the costs and features so you really know what you’ll be paying. It’s easy to get tripped up if you don’t understand the additional fees and charges.
The advice of Martin Lewis of moneysavingexpert.com? “The right broker is a big benefit. Far better to go to a broker than direct to one lender who’ll simply try and flog you their own mortgage. They will look after the market and possibly bring you better negotiating power. Overall I’m a broker fan!”
Would you like some remortgaging advice? We offer a comprehensive range of first charge mortgages (but not deals you can only get by going direct to a lender). Find out more here.