Are you losing £4000 every year to this?
So here we are at the beginning of June 2016 and mortgage rates are as low as they have ever been. It is now more than seven years since the base rate was cut to just half a percent. Mortgage lenders have money to lend and are competing to lend once again, the value of people’s property is on the increase in most areas, there is a general feeling of wellbeing and everyone I speak to is more optimistic that things are improving in the economy.
With all this in mind, I am amazed that there are not more people actively looking to remortgage to a better rate. I still regularly meet clients who have not remortgaged since the financial crisis and are paying far more for their mortgage each month than they could be.
The common misconceptions of remortgaging
These people are suffering from classic stay where you are and pay more syndrome. The unfortunate sufferers of this condition have shied away from their finances and are subsequently missing out on fantastic mortgage rates and serious savings! So what is causing it? Here are some of the justifications people have said to me:
• The banks are not lending
• My rate reduced when my last deal ended and I thought I had a good deal.
• I am already on a good rate.
• It’s only 1 % less it’s not worth the hassle.
• My bank said they couldn’t help me.
• They ask a lot of very detailed questions that I don’t want to answer.
• I had bad credit.
• I have some credit cards that I owe money on.
• I was told I would not be able to get a new mortgage by my lender.
• The process is too long and complicated.
• I don’t know what is a good deal or not.
• I would rather have the flexibility of knowing I am not tied in. If you have thought or been told any of these and have not looked for a better deal then you may well be missing out on the best mortgage rates available in my life time.
The truth about remortgaging
Now let’s not be silly - not everyone can have a mortgage, you have to be able to afford it and you need some paper work to back up an application. While it may seem confusing on the surface, the whole process can be made much easier by using a quality mortgage broker. We will guide you through the process, share our research with you and ensure the mortgage we recommend is the best and most suitable for you and typically there could be more than 10,000 different mortgage products available on any one day.
Remember that a 1% saving on a £100,000 mortgage fixed for 2 years saves £2,000. If you think that is a lot of money, we have shaved more than 3% off some mortgage rates we have seen. Who would not want a cheaper mortgage payment each month? Well there are a group of people who have the idea that if they stay and pay more they become mortgage-free sooner. Now for a mortgage broker this is a very unhappy thought; people not needing a mortgage is heart breaking. But we understand this is the goal of many of our customers, in order to achieve that, paying at a higher rate of interest is simply not the most efficient method. Just because you have remortgaged on to a lower rate and cut your monthly payment doesn’t mean you can’t still pay the amount you’re used to with the aim of clearing your debt faster, in fact doing this reduces the amount of interest you pay and cuts away at the capital portion of the debt instead!
Take back control of your finances
If you’re still not sure whether or not you’d be able to remortgage or if indeed you want to, just give us a call and we’ll be able to tell you and explain the costs and benefits of doing so
free of charge and without any obligation to proceed.
If you or someone you know has been effected by stay where you are and pay more syndrome, call us today on 01823 286271 and find out how we can help.