Getting a new Mortgage DealConcluding a new mortgage contract
Will you be at the end of your mortgage? What's next?
Though this may seem like a hassle, the good news is that mortgage interest now are at their lowest ever levels both and by switching to a better deal, you might find that your monthly installments are coming down significantly - especially if you have built an acceptable piece of equities in your home.
So if you are soon going to be remortgage, how do you go about it and what deal should you go for? What time should I request a new mortgage? Consideration should be given to obtaining a new mortgage two to three weeks before the end of your current business. Getting an quote from a mortgage provider can take a whole month to complete (although sometimes it can be faster) and a quote is usually available for three weeks or until a certain time.
However, it is also a good idea to talk to your current creditor to see what he can do for you. You do not need to notify your current lenders if you choose to switch to another creditor, as this is done as part of the work of the law. As soon as you have decided on your mortgage and an agreement in principle has been reached with the new creditor, you can fill in your request.
It will be easier to switch to another mortgage if you do not move home. With our practical pocket calculator you should get an impression of how much you can lend and how high your likely returns are. If you are applying for a new mortgage, it may be attractive to increase the maturity again, perhaps again to 25 years, in order to keep the repayment rates low.
Instead, if you can affordable it, cut the life of your mortgage to 20 years. Note, however, that shortening the duration of your mortgage will raise your mortgage payments per months. So for example, if you had a mortgage of 150,000 on a 2. 5% interest scale, you would be paying 673 pounds a months over a 25 year old loan, but 795 pounds a months over a 20 year old loan.
How much does the return transfer costs? A number of creditors levy a reservation or handling premium to cover a mortgage, usually around £100 - £150. Lots of mortgage also come with products charges which can be between £500 and £2,500. Remember that it may be less expensive to choose a mortgage with a higher interest but a lower commission than one with a lower interest and a higher commission.
There is a commission from your new creditor for hiring a valuer to value your real estate (typically £300-£400). You have to foot lawyer's costs with your lawyer, although you may find that your creditor is covering part of them. Wire transfers charges are also levied for the wire transfers of funds to your lawyer when you conclude them, and range from £25 to £50.
Should you choose not to take out building cover with your new creditor, you may have to make a payment of around £30. Remember that if you have chosen to opt out of your present mortgage business early, you may have to make an Early Redemption Compensation (ERC) payment. However, even if you don't get out of your mortgage early, you may still have to foot an initial fee to your lending agent for administrative expenses - this could be up to £300.
Unless you request another mortgage before your current business ends, you will be converted to your lender's SDR. SVR differs between creditors, but is usually a few points above the Bank of England's key interest rat. Since SVR is flexible, it can always vary (SVRs do not always track the basic rate), so keep in mind that your payments may rise or fall each month.
Which are the best mortgage types? When you have a 40% down payment (or the corresponding amount of your home's equity), the most competitively performing mortgage interest is as follows: The West Brom Building Society's two-year fixed-rate mortgage is estimated at 1.48% and returns at 3.99% after two years. There has been a £99 reservation charge and a closing charge of 2.395 and the total costs of the settlement are 3.7% APR.
For those who choose a HSBC mortgage, the HSBC SLT will charge you 2.13% and a £1,999 reservation charge. Total costs for reference are 2.3% APR. When you have a smaller 25% initial payment, the best prices are listed below: Swiss Post is offering a two-year fixed-rate mortgage at 1.98%, which will fall back to 4.49% after this period.
There has been a charge of 995 and the total costs for the settlement are 4. 2% APR. The Chelsea Building Society's five-year embarrassment is estimated at 2. 69% and returns to 5. 79% after five years. There is a £1.545 handling charge and a 130 handling charge (the total costs for settlement are 4.9% APR).
Santander's Livetime Trackers are available for 2.49% on a 495 pound bookingfee. Total costs for the settlement are 2.6% APR. The Chelsea Building Society's two-year fix is assessed at 3. 54% and falls back to 5. 79% after two years. Total costs for reference are 5.5% APR. One Direct's five-year fixing is traded at 4.39% and returns to 3.69% after that one year.
There has been a charge of 1.499 and the total costs of settlement are 4.1% APR. The First Direct also provides a life time tracking service at 3.99%, with a charge of 999 (the total charge for comparisons is 4.1% APR). There are a number of mortgage types you can check out on our mortgage canal.
And if you are not sure which mortgage is right for you, please call our mortgage broker London & Country on 0844 209 8725 for free and independently advised. YOU CAN REPOSSESS YOUR HOUSE IF YOU DO NOT MAINTAIN THE REPAYMENT OF YOUR MORTGAGE.