New Year mortgage resolutions

New Year mortgage resolutions
Your mortgage is likely to be your biggest monthly outgoing, so if you haven’t reviewed yours for a while, it’s a good idea to make sure you aren’t paying more than you need to.

Here are five resolutions homeowners with mortgages should make in 2017.

Check what mortgage rate you’re currently paying
Many people sign up to a competitive mortgage deal when they first buy a property, only to roll over onto their lender’s standard variable rate when it finishes, without seeing if they could remortgage to a cheaper deal.

If you’re paying your bank or building society’s standard variable rate, the chances are you could save yourself hundreds or potentially thousands of pounds a year by remortgaging to a new deal, so see how your current rate stacks up against alternative deals.

Find out if there are any early repayment charges
Before remortgaging, check whether there are any early repayment charges to pay when you move from your current deal. If you’re paying the standard variable rate, there usually won’t be any, but it’s worth double-checking before you start searching for a new mortgage.

If there are charges to pay if you move, it’s still worth investigating remortgaging, as the savings you make from switching to a new deal could potentially outweigh the cost of these.

Act now to take advantage of rock-bottom rates
Last year saw the launch of some of the most competitive mortgage deals ever, but we’re starting to see signs that they won’t be around forever. Several lenders have re-priced or withdrawn their best mortgage deals in recent weeks, and swap rates, which are a major factor in determining fixed mortgage rates, have started to edge up.

That means if you’ve seen a deal you like the look of, you should grab it while it’s still available. Don’t assume that if you’ve still got several months left to run on your existing mortgage deal that you won’t be able to take advantage. Many lenders allow you to lock into a new mortgage up to six months before it starts, so that you can move straight onto your new rate when your current deal finishes.

Compare lots of different deals
Don’t just go to your existing lender when remortgaging. Although it’s a good idea to find out what they can offer you, it’s important to find out what sort of deals other lenders can provide too.

Comparing lots of different mortgages can be time-consuming, so if you don’t want the hassle of trawling through endless different mortgage rates, a broker can do the legwork on your behalf.

Work out the overall cost of your remortgage deal
Low headline rates are really tempting, but always look carefully at the arrangement fees of any mortgage you are considering before applying.

Fees can really bump up the overall cost of any deal, so you’ll need to factor them in when working out which deal is likely to be most cost-effective. Depending on your individual circumstances, you may be better off going for a mortgage with a slightly higher rate and a lower arrangement fee than a mortgage with a low headline rate but a steep arrangement fee.
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