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Picture this: you are a homeowner, and you’re living in a beautiful house that you love, but there’s a catch. You are currently paying off a mortgage on that house, meaning your monthly mortgage payments consume a chunk of your income.
However, what if we told you there was a way to reduce your monthly payments or get a better deal on your mortgage? That is where remortgaging comes in.
Remortgage is switching your current mortgage to a new one, either with the same lender or a different one. This can be done for various reasons, such as taking advantage of lower interest rates, changing the mortgage term length, or accessing different features or benefits.
Especially after the economically rocky and erratic 2022, home buyers and homeowners are more hopeful for 2023. While the interest rates are expected to rise and peak at up to 5% in 2023, people are hoping for the year to be better than its predecessor.
If the fixed-rate term of your mortgage deal is ending or you need additional funds without adding to your existing debts, you can switch to a better one. However, finding the right deal can be difficult. Especially if you lack market experience, you may make wrong choices regarding the deals you switch to.
So, how to get the best remortgage deals?
Here are a few important steps you can follow to get the most suitable remortgage deals on your property:
Work with a remortgage broker.
A dedicated remortgage broker will help you find a new mortgage deal that best suits your preferences and circumstances. These professionals scan the entire market and help you solve the problem of choosing between staying with the same lender and choosing a new one.
A remortgage broker will also guide you as you switch to a new deal and handle the paperwork. If you choose to work with a fee-free mortgage broker, you can reduce your mortgage costs to a great extent.
Research and compare lenders
Start by doing some research to find out what lenders are offering in terms of remortgage deals. Your remortgage broker will help you in this process. Look at their interest rates, fees, and any special offers they may have. Use comparison websites or consult a mortgage broker to understand the options available to you better. Please list potential lenders you are interested in and compare them side-by-side to see which offers the best deal for your specific situation.
Check your credit score.
Remember that your credit score plays a big role in the interest rate you can get on your remortgage. Check your credit score before applying for a remortgage to ensure it is accurate and up-to-date. If your score is lower than you would like, improve it before applying. This may include paying off debt, ensuring all bills are paid on time, and correcting any errors on your credit report.
Consider switching to a fixed-rate mortgage.
Most homeowners choose to remortgage their properties to extend their fixed-rate term. Looking at the uncertainties 2022 had in store for borrowers, it is safe to stay with a fixed-rate mortgage in 2023.
A fixed-rate mortgage may be a good option if you want the peace of mind of knowing exactly what your monthly payments will be. These mortgages usually come with a higher interest rate than variable-rate mortgages, but they can be a good option to avoid surprises. Consider how long you want to fix your rate, which can impact your interest rate and monthly payments.
Look for low fees
As you remortgage your property, you must pay some fees, such as a valuation fee, legal fees, an arrangement fee, or an early repayment charge (if applicable). Consider looking for lenders offering low fees or ones willing to waive certain fees to secure your business. This will reduce the upfront costs of remortgaging and help you save money in the long run.
When working with a remortgage broker, seeking help from a fee-free broker is advisable to reduce your overall expenses.
Consider the long-term costs.
When comparing remortgage deals, consider the long-term costs of switching to a new deal. A deal with a lower interest rate may seem attractive, but if it comes with high fees or a short-term fixed rate, it may cost you more in the long run. Make sure you consider the total amount you will pay over the term of your mortgage, including all fees.
Do not rush the process.
Finally, the most important tip for finding the best remortgage deals in 2023 is to avoid rushing the process. Getting ahead of yourself may make you switch to the wrong deal. Seek help from financial advisers and experts before you remortgage your property while going through the process. Have a remortgage broker on board who knows the market like the back of their hand! Experienced mortgage brokers prevent you from making impulsive choices and act as a solid voice of reason.