Mortgages can be scary. For most of us, buying a property will be by far the most expensive thing we purchase in our lifetime and, chances are, we will need a big mortgage to do so. In a nutshell, it’s a shed load of debt!
For lots of people, the struggle to get a mortgage in the first place is very real. Lots of forms to be filled in, Pay Slips to be located, monthly spending to be analysed, credit check, ID – the list goes on. After all that initial pain, the mortgage is finally sorted. You’ve moved into the property. The mortgage payments are being paid by direct debit. All is taken care of. You can sit back and relax.
But what happens when that initial mortgage product comes to an end?
(Remember, you will have probably signed up for a mortgage product with an interest rate that only lasts for 2 to 5 years).
Usually your current lender will contact you three to six months before your current rate is due to end. They will offer you a new product so that you opt to stay with them (we call this a ‘remortgage‘). Often it’s a decent offer with a pretty tempting interest rate and, of course, the easiest thing to do would be to accept that offer, take the easy option and, with a quick signature, forget about the whole thing for another few years.
This is where you could be making a big mistake!!
Remember, this is the biggest debt you have. Even a tiny fluctuation in the interest rate could cost you thousands over several years. It is so important that you stop and do some research and make sure that this is definitely the best mortgage product for you before you accept the offer.
Find a reputable mortgage advisor, one who is a ‘whole of market’ advisor because they will have access to a wide range of mortgage products and, armed with all their knowledge of all the different lenders, they will be able to check all the available rates and make sure that you’re choosing the best one for you in your current circumstances.
Once they’ve found you that best rate, you then have the professional support you need to make the transfer to that new lender. They should guide you through all the paperwork, making it as painless as possible.
Sometimes, it is the case that the offer you’ve had from your current lender is in fact the best rate for you. Happy days! Now you can take that offer with the peace of mind that you’ve ruled out any better options and, if you’ve got a great mortgage broker, they can help you sort all the paperwork and get you onto the new product without too much hassle.
So, the big mistake you don’t want to make with your mortgage is accepting the first remortgage offer your current lender gives you without doing your research first!
If you’ve found this helpful please like and share, check out our handy videos on the Hudson Rose YouTube channel, have a listen to our informative (but fun!) podcast or give us a call and we can chat through your situation.
And if you’ve enjoyed this blog, you might like to check out some more:
It’s all about that Base (rate)…
Can you get a mortgage if you haven’t been self-employed for long?
What is ‘Mortgage Affordability’?
