Some Useful Tips
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Here are a few tips for people who are considering a refinance mortgage-- Make sure that the new mortgage you choose is available to homeowners who are remortgaging as not all of them are.
- Most people should choose a Repayment Mortgage over an Interest-Only one as there’s no risk of shortfall then.
- Check if the lender charges interest daily, this is better as the amount you owe becomes less every time you make a payment, meaning you pay less interest than with a lender who calculates interest annually. Annually means that 12 months worth of payments have to be made before the amount you owe is reduced.
- Using a Mortgage Broker can save you a lot of hassle and open up deals that wouldn’t be available to you as an individual. Opt for a ‘whole of market’ broker, they may be free or charge you for the service so check first. Do still check some other deals yourself though, as some lenders don’t offer their deals through brokers.
- Your lender may offer to add buildings insurance and Mortgage Payment Protection Insurance to your monthly payments. If you shop around and buy them separately you are likely to save money even though some lenders charge a fee if you decline their insurance.
- If money is particularly tight, a fixed rate deal means that during the fixed rate period you won’t have any nasty surprise increases in your monthly payment if interest rates should rise. Don’t forget though that when the fixed rate period is over, your payments could increase significantly if interest rates have risen.
Disclaimer-
This guide does not constitute financial advice. Anyone seeking financial advice should seek appropriate professional advice.
