If you have a mortgage, then it’s likely to be a significant part of your monthly outgoings. This means that getting the very best product for your situation can make a real difference to your finances and can definitely be worth making a bit of effort to obtain it. At the same time, remortgaging is not necessarily the right decision for everyone, so it’s important to think carefully before you decide whether or not it’s right for you. Here are some points to consider.
Can you exit your current mortgage?
As always, before you consider whether or not you should, it’s advisable to check whether or not you can, or at least whether or not you can without penalty. If you got a special deal on your mortgage then you may find that there is a lock-in period during which you can only exit the product if you pay a penalty. You might still want to do your sums to see if there is a case for remortgaging, but you should be realistic about the impact such a penalty might have.
Could you get a mortgage now?
The affordability criteria have been in place for several years now, however, these are minimum standards, not targets. In other words, there’s nothing whatsoever to stop lenders from tightening up their acceptance criteria beyond the minimum requirements. It’s, therefore, a good idea to do some research on what deals are available now and who is likely to qualify for them.
You also need to be realistic about how you’ve managed your finances since you’ve had your current mortgage. If you’ve found yourself in challenging financial times and that has been reflected in your payment history, then you may find it difficult to find a lender who will take you on now. Your situation may be somewhat easier if you took an arranged payment holiday due to COVID19-related issues. It does, however, very much remain to be seen how lenders are going to deal with these over the long term.
Be aware, however, that a good mortgage broker may be able to find deals which you would never have found on your own, so don’t give up if the market looks tough.
Are you able to cope with the current practicalities of remortgaging?
When you remortgage, you basically go through the standard mortgage application process all over again. This means getting a valuation and this means getting a surveyor on-site. This means dealing with all the COVID19 protocols. Are you able to implement them? If you’re not confident about this, then it’s safer to hold off remortgaging until you are (or until COVID19 ceases to be an issue). At the end of the day, while remortgaging can save you a lot of money, nothing can compensate you (or anyone who visits you) for the damage COVID19 can do.
Can you get a better deal from your current lender?
Before you make a final decision on whether or not to go ahead with the remortgaging process, it may be worth checking in with your current lender to see if they can make you a better offer. That could give you the benefits of remortgaging without the cost and paperwork.
Are you remortgaging for the right reasons
Last, but very definitely not least, it’s important to be scrupulously honest with yourself about why you’re remortgaging. There’s a big difference between remortgaging to save money on a mortgage you’re confident you can afford and remortgaging to try to make ends meet.
If your finances are that tight, then you really need to get financial advice and look at all your options very carefully. You may find that you can keep your home, but even if you can’t, you can vastly improve your chances of selling and moving on our own term, rather than waiting for foreclosure.
Your property may be repossessed if you do not keep up repayments on your mortgage.