UK Remortgage Quotes
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Remortgaging your house is potentially one of the best financial decisions
you can make. Banks and building societies take advantage of existing customers
who are happy to stay on the more expensive Standard Variable Rates. However
lending institutions know that a small (but growing) percentage of homeowners
are looking for the best mortgage deal. Therefore to these borrowers, who go to
the trouble of looking to change their mortgage deal, banks will offer special
attractive mortgage deals to either keep customers or tempt them from another
building society.
The problem with getting a remortgage is that it is potentially confusing and
almost bewildering. There seems to be as ever growing array of mortgage deals,
with many different types such as tracker, fixed and flexible mortgages. In
order to make the most profitable decision it is worth checking out remortgage
quotes from various sources. In addition it may be worth taking the advice of a
mortgage dealer. Remortgaging advice is governed by the FSA and as a consequence
the mortgage broker is required to give impartial advice. They can give quotes
but they can’t recommend a particular mortgage. That is for you to decide. In
addition the mortgage agent should tell you if he working for a particular
company and is limited in the range of quotes he could advise on.
When looking through the different quotes it is important to consider the
implications of both different interest rates and any charges and fees
associated with both leaving your existing mortgage and taking on a new
mortgage. For example if you were on a standard variable rate of 7% on a 30 year
£200.000 mortgage. You would be paying £1,343 on a repayment mortgage. If you
were able to switch to a discounted variable rate of 5% your monthly payments
would fall by £258 a month. Over the course of 30 years you could save an
amazing £80,000. Even if there were costs of £2,000 in Remortgaging then it will
still have been worth moving after only 4 months. This case is a particularly
good example of a remortgage. But there are several cases like this where you
could save upto £200 a month through finding the best remortgage quote. If your
mortgage term is for a shorter period e.g. 15 or 20 years left the fees
associated with Remortgaging become increasingly more important. For shorter
term mortgages it is more important to get low fee remortgage rather than
concentrating on the maximum reduction in interest rates.
The second big advantage of Remortgaging in the UK is that it enables
homeowners to consolidate their debts in one place; often with the best interest
rate for borrowing For example if you were borrowing £4,000 on a credit card you
could be paying a monthly interest of 17%. If you were able to remortgage and
get a bigger loan on the value of your house you could use this equity from your
house to pay off your credit card debt. This means your annual interest payments
on this loan would fall from £680 (17%) a year to £200 (at 5%) This kind of remortgage
is often known as debt consolidation and has become popular in the UK because of
rising house prices. Rising house prices mean the house is worth more than the
existing loan. Therefore building societies are willing to give you a bigger
mortgage leaving you equity to spend or as in this case you can use it to pay
off higher interest paying loans. When considering remortgage quotes it is
important to consider implications such as these.
About the Author
Richard Pettinger studied Politics and Economics at Lady Margaret Hall,
Oxford University. He now works as an economics teacher in Oxford. He enjoys
writing essays on Economic and he edits an Economics Blog focused on UK and US
economies:
http://www.economicshelp.org/econ.html
Follow us @Scopulus_News
Article Published/Sorted/Amended on Scopulus 2007-04-07 15:28:26 in Business Articles
