Are You Buying Your First Home?

By Author: Alisdair Cosgrove
Total Articles: 184
Comment this article

With the Bank of England having dropped the base rate by 2% since October many homeowners with variable rate mortgages are likely to be breathing a sigh of relief as their repayments start to fall. In some cases, such as where lender fails to pass on the full rate cuts, some consumers may be considering remortgaging and moving their mortgage to another provider that does pass the rate cut on.

Anyone that is thinking of remortgaging needs to bear a number of things in mind to ensure that they get a good deal and do not pay over the odds on their mortgage. The whole point of remortgaging is to save money on your mortgages, so you need to take your time when it comes to choosing a new deal or provider.

You want to try and get the most competitive rate of interest possible in order to keep your repayments down, and this means comparing interest rates and ensuring that the lender has passed on the recent base rate cuts to borrowers. You also need to remember that the deposit requirement will differ from lender to lender, and you should make sure that you compare deposit level requirements to ensure that they are affordable ...
... to you.

You will also need to compare what sort of arrangement or set up fees each lender charges, as these can bump up your upfront payments considerably. Make sure that you check both the interest rate and the arrangement fees, as some lenders fool consumers by offering low interest rates but then charge them a ridiculously high arrangement fee, which makes up for the lower interest rate.

You should ensure that before you commit to a remortgage you first contact your existing mortgage provider and find out whether they charge an early settlement fee on your existing mortgage, and if so how much this fee will be. By checking on this, and also by comparing interest rates and arrangement fees from any new providers that you are considering you will be able to determine whether remortgaging is going to prove beneficial and save you money.

One thing that will affect how much you have to pay each month by way of mortgage repayments is the amount of time over which you take the mortgage loan, otherwise known as the repayment period.Repayment periods can vary between lenders, so you also need to compare what repayment periods each lender offers in order to help you to reach a decision.

When you compare lenders and interest rates you should remember that if you have bad credit or a low credit rating the rate of interest that you will be charged will most likely be a lot higher than the typical APR advertised by each lender. You should be prepared for disappointment if your credit is very bad, as the current tight credit conditions could mean that your credit stops you from getting a new mortgage loan altogether.

Using the Internet is a great way of comparing different deals and lenders, and could help you to quickly determine whether a remortgage is the right move for you.
Alisdair Cosgrove is an expert in the field of personal finance in the UK and has been writing articles on the web for many years and can find more of his articles at the UK site Glitec.co.uk, offering loans and also a great deals on best mortgages. Visit Glitec.co.uk today for a great mortgage and loan offer and to read more articles from Alisdair.