Remortgaging Myths - Fixed Rate Mortgage and Other Myths Explained!
When you come to the end of your fixed rate mortgage, is it time to change? Whilst there’s a lot of myths surrounding remortgaging, some aren’t true. Find out the debunked myths around the end of a fixed rate mortgage and remortgaging, here.
The word remortgage strikes fear into the heart of many homeowners. Though not is all as it seems. Modern society has morphed the idea of someone remortgaging into the punchline of a joke about someone’s financial security.
So, you’ve waded through the emotional and financial turmoil of your first mortgage. You’ve moved into the new home and the champagne corks went flying in all directions. Fast forward a couple of years and the champagne can stay firmly on ice. You may have more committed expenditure, your interest rate may have just jumped up or you may just be looking to draw down a lump sum from your mortgage. Financial outgoings and further money owed can place an onerous burden on one’s ability to repay a mortgage loan. This can lead to a multitude of people seeking to remortgage.
In simple terms, remortgaging is where you move from one mortgage to another. This may be because you cannot afford the rate that your current lender provides, you have come to the end of your fixed rate mortgage or you have simply found a better deal with another lender. The word remortgage often strikes a number of reactions. Whether it be a gasp, snigger or awkward look at the ground that suggests ‘ooh not for me, thank you’. But why? By reducing your mortgage rate by even the smallest amount you can save yourself thousands in the long term.
The assumption that someone who is looking to remortgage lacks financial security, fend for themselves or lacks financial fortitude needs to be rebuked, as in most cases, it is simply untrue. Therefore, this article will debunk these myths and show why remortgaging might be the right option for you. Here are the myths around remortgaging, that both Mortgages Online and mortgage lenders know aren’t true.
1. There’s no point in changing:
Quite simply, remortgaging can be a massive benefit to your purse/wallet. For a lot of people, when you first take out a fixed rate mortgage you will usually be placed on an introductory deal which tends to last for a shorter term. But when these shorter deals end, you are likely to be placed on your lender’s Standard Variable Rate (rate SVR) which in more cases than not means an increased interest rate and in turn, a much higher monthly payment than you would probably be getting if you were to seek a new deal from another lender. So, do your homework, speak to your current lender and seek potential advice on what the best option would be for you moving forward!
2. Even if you find a better deal, fees nullify this:
Although getting a remortgage may require the assistance of a broker or solicitor remove the interest of the original lender and then moving onto the new deal, these fees can sometimes cover themselves with the savings you are making. On top of that, a lot of remortgage deals come with ‘free legal’ as part of the deal, so, no solicitor fee to swallow! Equally, the help of a broker or Independent Financial Adviser can help you find the best deals (and ones that offer free legally). Remortgaging can be a stressful ordeal but should be a straightforward switch transaction if you use a knowledgeable broker who does the work for you.
3. It’s embarrassing and only for those that find themselves in a financial struggle:
As we’ve previously said, the common mistake that people tend to make is that those who tend to remortgage are only doing it, because they find themselves in a position of financial difficulty. While remortgaging can be an antidote for this, it can also just be used to change to a deal which suits you better and keeps more money in your pocket. I mean, come on, it’s 2018. No one wants to lose thousands of pounds to save face. The best way to think of it would be like comparing it to changing your gas, electric or water provider.
4. It’s only seen as a last resort:
There can be hundreds of reasons why someone may want to remortgage (maybe don’t take that literally but you get the idea). Why should you feel like you should overpay on your mortgage just because you’ve been with a lender for a long period of time and out of your introductory period or you want to scour other options to save money? Nothing about that spells out ‘last resort’, instead it says that you’re taking positive steps to manage your own finances in the best way possible to provide a more cost-efficient means of living.
5. Credit scores aren’t an issue when looking to remortgage:
Contrary to popular belief, a bad credit score can have negative ramifications during the process of your remortgage. This can come despite keeping up to date with existing mortgage repayments from the lender that you currently want to change from. Therefore, it’s important to give yourself time to amend any problems that may arise and worsen your current credit score.
This can include explaining any marks against your name and also checking the financial records of people who you are linked to. If you find that your credit score has been negatively impacted by someone other than yourself then you can ask for a disassociation notice if the link between you and this person.
Make sure you keep an eye out for any incorrect markings or checks against your name that may negatively impact your credit score. Double check your repayment records and any activity within your credit accounts. Also, double check if you have electoral roll status. This can add a great gloss to your credit score if you are listed.
The easiest way to do all the above obtains a copy of your full credit report.
So, there you have it. Don’t be ashamed of remortgaging, as it can be a very useful friend! If you’re looking to remortgage, use MO's easy application form to see what you could save. Guess what? We can also offer you a life insurance quote too! Speak to one of our advisors about remortgaging, fixed-rate mortgages and life insurance, today.