Chances are you can save money on your mortgage right away. You don't have to move house and it may even cost you nothing. How? By moving your mortgage to a different lender. It's called remortgaging and you don't have to wait until you move home to do it. Hot competition means home loan lenders are fighting for your business, so there could well be dozens of mortgage deals out there that could reduce your payments right now.
By remortgaging you can reduce your monthly payments, or raise extra money, or help meet an endowment shortfall. But before you take the plunge check:
- Does your current lender impose a penalty for moving your loan elsewhere?
These are common with fixed rate and discount mortgage packages. Ask your lender for a statement of the redemption penalties that apply to you now how much the fee is and how long the penalty lasts. If it is high it may be worth waiting to move your loan until the penalty period ends. But if it's not too high it may still be worth moving because even after you've paid the penalty you could still be better off with a different deal. - How much will moving your loan cost?
A remortgage could mean paying new set-up costs: mortgage arrangement fees (around ¯¿½300), valuation fees (about ¯¿½200 for an average property) and legal costs, (about ¯¿½350). You may have to pay your old lender to wind up your old mortgage (about ¯¿½150). If you use a broker to find your new lender there may be brokerage fee of up to 1 per cent too. BUT some lenders waive some or even all the fees in order to get your business and some brokers don't charge customers. Try to avoid mortgage indemnity guarantees (MIG) if you borrow more than 90-95 per cent - it can add a hefty sum to your loan.
Remortgaging is usually quicker and far less stressful the buying. It generally takes four to six weeks and you'll need ID, statements from your existing mortgage lender (to prove you were not in arrears), and proof of income (pay slips and bank statements for three to six months), plus your employer details.
Got them? Then find the new deal you want. The best place to start is our .
Remortgaging is usually quicker and far less stressful the buying. It
generally takes four to six weeks and you'll need ID, statements from your
existing mortgage lender (to prove you were not in arrears), and proof of
income (pay slips and bank statements for three to six months), plus your
employer details.
Got them? Then find the new deal you want. The best place to start is our and have a look at some of the current mortgage
best buys. If you want some help from a specialist adviser to help you work
out the best deal for you then talk
to a mortgage professional. This is done over the phone and at your convenience.
Once you decide on a lender and fill in the forms then they'll do the rest,
including asking your old lender for details of the deeds, etc. Finally, you
sign the new mortgage contract, the new lender pays off the old one, and you
start paying the new mortgage.
