When it comes to remortgaging there are so many misconceptions surrounding the market. We want to share 5 remortgaging myths that could be stopping you from getting the best deal.
Remortgaging and changing your provider could significantly cut your interest rate and reduce your monthly mortgage repayments.
Myth 1: Remortgaging should be your last resort
One of the most common myths about remortgaging is that you should only consider it if you need credit and can’t obtain it any other way. This isn’t necessarily the case. Other reasons why you might consider remortgaging is to get a better interest rate especially if you are on a fixed-rate mortgage that has come to an end, or you want to choose a more flexible deal, or you want to switch from an interest-only mortgage to a repayment mortgage.
Myth 2: Your debts will increase if you remortgage
The opposite could actually happen. One of the main reasons that you would remortgage is to replace your current mortgage with one that has better terms and conditions. This can then result in a lower interest rate, lower fees and lower monthly repayments.
Alternatively, you can remortgage in order to raise more credit or to consolidate your debts. So yes you would be technically increasing your debts in this case but you will only be paying one interest rate. Mortgage interest often works out cheaper than borrowing on a credit card.
Myth 3: The interest rate is the only important factor
It is an important factor when choosing a new mortgage but it shouldn’t be your be-all and end-all. It is also important to consider the cost of remortgaging. When you remortgage, you can expect to pay fees both to your existing lender and to the new one. These fees could take the form of early repayment fees, exit fee administrative charges, or arrangement fees with your new lender. Make sure you investigate this beforehand.
Myth 4: Remortgaging is complicated
Remortgaging is not complicated and we always advise starting the process early so you can shop around and find the best deal that suits you best. We speak with our clients six months before their current mortgage is due to expire so that we can search the whole of the market to find the best mortgage lender to suit their circumstances.
Myth 5: You can’t remortgage if you have bad credit
It is possible to remortgage if you have bad credit, however the best deals probably won’t be available to you if you do have bad credit. It is likely that your lender might want to charge a higher rate of interest to offset the higher risk you present. We would advise you to check your credit score to find out what you are working with and carry out the steps to fix any problems.
We work with all our clients to find the best lenders for your circumstances. If you would like to speak to one of our mortgage advisers, then please get in touch or call 01932 943028.
Please note: Your home maybe repossessed if you do not keep up repayments on your mortgage or other loans secured on it.