13 August 2019

IT PAYS TO PLAN AHEAD WHEN IT COMES TO REMORTGAGING

The summer months tend to be quieter for the housing market as people head off on their holidays. This year is no exception, according to the latest Halifax house price index, but with new buyer enquiries increasing in July, there are encouraging signs that the market may pick up a little in the autumn.

One area where lots of activity is expected is remortgaging. With more than £26bn-worth of mortgage deals due to mature in October – the largest monthly volume of the year, according to Yorkshire building society – thousands of borrowers will be looking for a new mortgage. If that is you, it pays to plan ahead and be prepared.

Speak to a mortgage broker like SPF Private Clients ideally at least a couple of months beforehand, although if you have taken out a mortgage with us in the past, we will get in touch with you. Think about whether you need extra cash for home improvements or debt consolidation – this is the time to mention it so it can be factored into the sums.

Those coming off five-year fixed-rate mortgages will find that pricing is now considerably cheaper for an equivalent deal, meaning lower monthly payments. You may also find that your property has appreciated in value since you took out the mortgage, resulting in a lower loan-to-value band, and possibly a cheaper rate.

Consider all the options available. Your existing mortgage lender is likely to offer another deal for you to seamlessly slip onto, but this may not be the best option. Make sure you compare it with what else is on the market, rather than assuming it’s the best deal. SPF Private Clients can help with this.

If you have savings earning next-to-nothing in the way of interest but wish to hang onto them rather than pay down the mortgage, it may be worth considering an offset mortgage. This will enable you to reduce the interest you pay while still retaining access to your savings in case of emergency.

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