Brexit Top 5 Tips for Remortgaging
There’s been a lot of discussion around the negative impacts of the UK’s vote to leave the EU in the news recently, but it’s not all doom and gloom with the Bank of England’s base rate still at its record low. Check out our 5 top tips on remortgaging after Brexit to find out more.
These tips are general, for advice 100% tailored to your circumstances call Which? Mortgage Advisers on 0800 316 1126
1. Do your homework – and fast
You should start looking for a new mortgage three to six months before your deal period ends. Fear not if you’ve left it later than this, as an independent mortgage broker can help source the right deal. Rates have been at or near all -time lows for some time already, and there has been a new wave of fixed -rate deals that have come onto the market.
Loan to value, or LTV, is expressed as a percentage and is key when you’re remortgaging. To find out your LTV, take the value of your mortgage – for example £100,000 divide it by the value of your home for example £300,000, and multiply that number by 100. In this example your LTV is 33%.
The lower your loan to value, the better the rate you can get. So if house prices fall, this could bring down how much your house is worth and therefore decrease your loan to value. If you’re worried about house prices falling over the next few months, it may be worth acting now.
2. Consider fixed and tracker/variable rates
With a fixed -rate mortgage the interest rate stays fixed for a set period – usually two or five years – but it can be up to 10 years. This means that every month during the fixed period your repayment stays the same until the fix period ends, when the rate can jump up. A tracker or variable -rate mortgage is where the interest rate tracks the Bank of England base rate or your lender’s standard variable rate ( SVR).
Whether it’s best to go for a tracker or fixed -rate mortgage depends on your plans (when you’ll next move) and your appetite to risk. If you’re remortgaging, fixing your mortgage rate might be an option so you know how much your mortgage payment is each month. It really comes down to your personal plans, and your own appetite to risk, so it’s best to talk to an impartial mortgage adviser who can tailor their advice to your personal needs.
When choosing a broker, it’s best to go for one that looks at the whole of the market rather than being tied to any particular lender or panel. Check whether they’ll also let you know about direct deals that you can only get by going straight to a bank or building society.
3. Shop around
Don’t feel that you have to stick with your current lender – although they should probably be your first port of call when looking for a better deal, others could offer something better. Shop around and speak to a mortgage adviser who will also let you know about direct deals, to see what other mortgages are available. Here at Which? Mortgage Advisers we are completely whole of market and will let you know, completely free of charge, of you could get a better rate by going direct to a lender rather than using our service.
4. Look at the overall cost
When comparing different rates, look at what your new repayments would be with your existing monthly costs when calculating whether you’d be better off. Make sure you include the cost any of arrangement fees for the new mortgage deal, as well as exit penalties from your current mortgage. Our impartial advisers will let you know about all the costs involved upfront and calculate which rate works out best for you overall.
5. Examine the other features
Look at what features the new mortgage deal comes with – can you make overpayments, take payments holidays etc? Make sure it meets all your needs.
6. Take advice you can trust
An independent, expert mortgage adviser who is not tied to one particular lender and isn’t paid commission will be able to provide you with impartial advice on the best remortgage for you. Which?’s independent mortgage brokers can offer you completely impartial advice based on your individual circumstances. And because our advisers aren’t paid commission you can be sure that they’re only recommending the deal that is best for you.