What should I consider when re-mortgaging my property?
This article was written for and published as original content in the East Anglian Daily Times property section.
With lots of people coming to the end of their fixed rate mortgage deals, more and more home owners are re-mortgaging their properties. Below are some important factors to consider to try and make the best decision for your finances and avoid complications during the process.
Interest rates
One of the most critical things is the interest rate being offered. Even a small difference in rates can result in significant savings over the long term. If rates have dropped since you took out your original mortgage, re-mortgaging could lead to a lower monthly payment.
Mortgage fees and charges
While a new mortgage deal may offer lower rates, consider any fees involved in re-mortgaging. These might include early repayment charges from your current lender, arrangement fees, valuation fees, and legal costs. Be sure to weigh these costs against potential savings to determine if re-mortgaging is financially beneficial.
Loan-to-Value (LTV) Ratio
Lenders typically offer better rates to homeowners with a lower LTV ratio (the amount you owe relative to the property's value). If your property has increased in value since your initial mortgage, this may reduce your LTV ratio and make you eligible for better rates.
Your credit score
Lenders use your credit score to assess your ability to repay a mortgage. If your credit score has improved since you took out your original mortgage, you may be eligible for a better deal. If your score has decreased, it may be more challenging to secure beneficial terms.
Timing
Timing is essential when re-mortgaging. You’ll want to avoid penalties for leaving your current deal early, and it’s important to start the process several months before your current mortgage term ends to avoid being moved onto a higher standard rate.
How to ensure a smooth process
To ensure a smooth re-mortgage process, be proactive about gathering necessary documents, such as proof of income, bank statements, and details about your current mortgage. Working with a mortgage broker and a Solicitor can help guide you through the process, saving time and ensuring you find the best deal available.
For more information on our conveyancing services, please call our expert property team on 01206 574431 or email enquiries@tsplegal.com