mortgage in the uk

The current economic landscape in the UK is in its turbulent state. It has been largely responsible for the latent mortgage approval levels since the beginning of this year. The soaring rates of interest coupled with the ever-increasing living cost is restricting aspiring home buyers from materialising their wish to purchase a home or shift to a new home.

The difference in the net mortgage approval between August and September (from 45,400 to 43,300) is 2100, with the latter month showing the lowest of all. These figures are even below what has been forecasted by Reuters. It clearly indicates the fall in the number of people seeking loans to buy their first home or to move to a new home.

Besides, this is significantly pointing to the growing number of people relying on remortgage to pay debt as the best alternative during current times. You must be wondering if there is an opportunity to capitalise on the fluctuating scenario of the mortgage market.

Affordability is one of those reasons that compel borrowers to continue with their existing loan providers. Whether you are a first-time buyer who is looking forward to entering the property market or an existing homeowner who wants to look for a feasible mortgage deal, you must analyse the ongoing economic situation before making any decision.

Dive deep into this blog to acknowledge the right time to remortgage.

How to determine the best time to remortgage?

Do you know that you can stash some cash on your mortgage? It is through re-mortgaging that you will opt for a better mortgage deal available at comparatively cheaper rates. This applies to a property you already own and lets you overlook the increasing rates of mortgage.

Moreover, your circumstances might change with time, like you switched your job or left the previous one to be self-employed, etc. It does not matter if you are buying a new property or moving to another; consulting online mortgage brokers can be rewarding for you.

They can guide you on the type of remortgage offer you should get and help you understand the ways you can bargain with your lender or a new one. These mediators are approachable online at any time and from any part of the world.

When should you consider remortgaging?

Apart from fulfilling the expectation of getting better rates, remortgage lets you settle with feasible terms and conditions. In some cases, you may consider this option to extend your borrowing limit to upgrade to a pricey property or to take advantage of the equity accumulated against the value of your home.

The above factors are the basic motivation behind considering re-mortgaging. However, getting it at the best rates will depend on the timing. Here, you can take a look at the reasons for choosing this option.

The current deal is expiring – The tenure to enjoy fixed rates usually lasts for five years. After the introductory offer ends, you will have to follow the variable rates that the loan provider will decide. The new interest will surpass the previous one. In this situation, you might think of re-mortgaging after carefully examining the availability of competitive rates in the market. Your research should begin in advance, or else you will have to deal with the consequences of delays in the form of standard variable rates.

Better deals elsewhere – Everyone wants to downsize the pile of debt, and the best way to achieve it is by opting for a comparatively reasonable interest rate. You can avail yourself of the facility of early repayment by paying small exit charges. It might seem like an additional expense at first sight, but it can turn into a sizeable amount of savings in the long run. For this reason, weighing the available choices is very crucial to find which deal is the most suitable for you out of the many offers you have come across so far.

The home value has increased – Depending on the real estate market, the value of your property might go up and down with time. The meaning of home value going up is that you enter into a position where you are eligible to get pocket-friendly interest rates. Remortgaging provides you with an opportunity to switch to a suitable deal. Doing all the calculations and comparisons is a must, even in this case.

Not ready to handle the soaring rate of interest – Mortgage rates will always bother you, especially with the closure of the introductory fixed interest term. Besides, the base rate that Banks offer can increase at any time, thereby impacting your mortgage payments. You must also validate the rates that are being offered to new customers.

Need to take out more money – Remortgaging allows you to cover additional outgoings like refurbishing the home interior. For this reason, you might need to borrow more, which your current offer might not permit. To adjust these types of expenses or to settle any past debts, you will require extra money. It can be arranged through this provision.

What should you be careful about the mortgage?

You might have to pay arrangement fees at the time of getting a new mortgage. On the other hand, there are fee-free remortgage options accessible to you at the same time. You will get to know about their existence once you shop around the mortgage market cautiously.

Besides getting relief from the arrangement fee, you might enjoy additional exemptions from legal or valuation fees. This type of offer comes from a lender with a motive to grab the attention of new buyers looking for a mortgage.

This facility allows you to reduce the upfront cost, but the overall expenditure might go beyond your budget. Be aware of the fact that mortgage deals with arrangement fees might carry low interest rates and vice-versa.

The bottom line

The property market has become very competitive, and the mortgage approval rate has been slowing down with time. Although it might be scary, you can search for remortgage opportunities after making sure about the right time to look for this switch. Be careful about the different charges you might have to pay for this.