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Thursday, 18 December 2014

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Time to take a fresh look at your mortgage

Mortgages are, for most of us, our single biggest monthly expense and therefore they should be the first area you look at if you’re reviewing your outgoings.

Remember, though, you don’t have to move home to move your mortgage.

Demand for remortgages is increasing at the moment as the expectation of a Bank of England base rate rise in the near future grows.

If you’re coming to the end of your current deal and looking around to see what else is on offer, or if you have some equity in your home – at least 25 per cent of its value is best – and a good payment history then you may well be able to secure one of the best deals currently available.

As a starting point you need to know what you are paying at the moment. If you’re not sure, then check with your lender. Make sure you know how long your current deal has left to run and whether there are any costs to switch.

This action in itself may prompt them to offer you a better deal when your current one ends.

Now you can start doing some work of your own. Have a look at some lenders’ websites and press advertising to get an idea of some of the rates on offer.

Always consider lenders who have a branch in your area, so that you can talk to them face-to-face should you need to.

Do keep in mind that on some of the so-called ‘Best Buy’ deals, arrangement/product fees can be in excess of £1,000, so this needs to be considered in terms of the overall cost.

For many remortgage deals, you should not have to pay any valuation or legal costs to transfer your mortgage to the new lender. However, this is not always the case and this is worth checking at an early stage as this could lead to some additional outlay. To judge whether remortgaging is worthwhile, compare the costs with the savings – but do keep in mind that the costs may well be payable upfront while the savings will be made over a period of time.

Now is the time to speak to a mortgage adviser to see what deal is best for you. Many people give up on the process at this point as they remember the hassle of buying their house. But remortgaging is much simpler. Once you’ve booked your appointment, take your last few payslips, bank statements and ID with you and you should be in and out of the office within an hour or so.

After that, if you decide to go ahead, your lender should look after the whole process for you without difficulty.

  • The Cumberland offers a hassle-free remortgage service. For details call into your local branch, visit www.cumberland.co.uk or call phone 0845 601 8396. Your home may be repossessed if you do not keep up repayments on your mortgage.

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