Your mortgagetime to switch?

By: Michael Challiner

Would you like to save money on your mortgage? Over 50% of homebuyers are wasting money by paying over the odds for their mortgage every month. This is normally due to the fact that they’re paying their lender’s standard variable mortgage rate.

These standard variable rates are frequently 2 percentage points higher than lots of the best market deals, so the simplest way of saving money is to switch deals. If someone has a ?100,000 loan and switches from a standard variable rate, there will be a saving of around ?1000 per year for each one percentage point in the interest rate. As the difference is often 2%, this would save ?2000 every year.

Contrary to common belief, remortgaging is relatively easy and hassle-free. More and more lenders are specializing in re-mortgage packages and frequently offer fee-free deals with legal fees thrown in. The whole thing is normally completed in around six weeks.

Re-mortgaging is not simply to do with the money saving side of things; you can also make use of some of the equity which has been built in the value of your property. Borrowing via your mortgage is much cheaper than doing so through a personal loan.

If you’re already a buy-to-let investor, re-mortgaging is a way to fund extensions, alterations or repairs.

If your equity in the property has built up sufficiently, it may be possible to re-mortgage and use the proceeds to build up your property portfolio.

If your re-mortgaging requirements are modest, it is best to go for a free-switching loan, where the mortgage provider pays your valuation, arrangements and even legal fees. Once you are borrowing is way over the ?100,000 mark, then it would probably be best to go for the very best rates, even if you pay your own expenses. The savings are going to make it worth-while.

Lenders are looking for ways of extending their range of services and there is a lot of competition in the remortgaging market. As an example of this, the introduction of a flexible mortgage is an interesting development. They may well be a help to self-employed borrowers, offering them more control of their mortgage and the ability to under and over-pay to fit in with their varying business circumstances. Money earmarked for the VAT or the Revenue can be used to reduce the interest on the mortgage until the time comes when the money is actually needed. This type of loan is also useful if you need to reduce or suspend payments at time, say during a career break or for family commitments.

It’s possible for flexible mortgages to include banking facilities, so you can use a cheque book or credit card or make direct debits in the same way as with a bank account.

There’s a wide choice of home loans – some 4,000 different ones, from over 100 lenders. Because of this, it’s really important to take some advice from some-one who knows and understands the whole market. The most simple and sensible way to do this is via an internet broker. A broker has access to the very latest and most up to date deals and will search the market to find the right deal to suit your circumstances. You’ll get the very best deals, with a minimum of fuss and form-filling.

We think you’ll find it rewarding – why not get on-line today and check it out?

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