Moving your mortgage?
Make sure you really make the most of your finances.
Over the past few years many people have moved their mortgage: remortgaging, as the industry call it. For some people this is to raise money by releasing some of the equity in their home – that’s the added value, which has built up in the property since they first took out the mortgage. But for an increasing proportion of remortgagers, the aim is to manage their monthly repayments or overall costs, by switching to a more suitable deal.
There’s no doubt that many people can save money this way - By comparing fixed rates, monthly repayments that don’t change against tracker products that follow an index through to capped rates where repayments don’t go above a certain level, its easy to see why so many people seek advice to get the most suitable arrangement.
But the key to a successful remortgage is doing your homework properly, and making sure you get the right deal. And that’s where some professional advice comes in very handy. Michael Jones can help you a) assess your current mortgage and b) find you a new deal that really suits you and your requirements.
Choosing the right product
The first step in changing your mortgage is to check what early repayment charges and other charges you are liable for if you end your current mortgage. We can take a good look at the small print – with many mortgages; the devil is in the detail. Newer mortgages all come with a key facts document, which makes this all much easier by presenting all the main details in plain English.
If you are locked into your mortgage, you need to decide whether it is worth switching to another – or if you should stay put until the early repayment charges have expired.
If you feel it is – and again we can help you see the facts clearly – then the next step is choosing the right deal. Fixed, capped, discounted, flexible, offset…there is a mind-boggling range of options available, with more than a thousand mortgage products on the market!
Fixed-rate mortgages are ideal for people who like to know how much they are spending each month. The rate is usually fixed for between two and five years – but then will switch to another rate, at which point changing your mortgage can become a very sensible option.
Discounted mortgages offer a reduction off the standard variable rate for a set period. If rates fall further, the rate that you will pay will also go down – but when rates rise, so will your mortgage payments.
Capped-rate mortgages set a limit at the rate you pay. If rates rise, your payments will not go above that level – but if rates fall below the cap so will your repayments.
Flexible mortgages allow you to overpay and underpay when you choose and without penalty.
Offset mortgages allow you to offset your savings and current account balances against your mortgage debt. If you have say a mortgage debt of £120,000 and savings of £30,000 – you will pay interest on the balance of the loan, i.e. £90,000.
Offset mortgages and an increasing number of fixed, capped and discount deals are now coming with more flexible features, which can bring you real benefits if you want to be able to clear your mortgage faster when your circumstances change.
With so many options to choose from, getting some professional advice is a very wise move. Michael Jones can help you compare all the benefits, take your circumstances and aims into consideration and talk through the pro and cons of your mortgage ‘short list’. If you’re really going to save money, it’s essential to make the right decision!
Check how much you will benefit.