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  • Writer's pictureRichard Jennings

How to Avoid Mistakes When Remortgaging.

Are you looking to remortgage your home but afraid of making mistakes? You're not alone.

Remortgaging can be a complicated process and one wrong move can cost you thousands of pounds.


But fret not, as in this blog post, we will guide you on how to avoid common mistakes when remortgaging. By following our tips and advice, you can make the most out of your remortgaging journey and secure a better financial future for yourself.


So, let's dive in and learn how to navigate the remortgaging process without any mistakes.



Woman filling in mortgage application forms

Not comparing multiple lenders and deals


One common mistake you might make when remortgaging is failing to compare multiple lenders and their respective deals. It's a misstep that could cost you dearly in the end.


You see, not all mortgage deals are created equal. They can vary significantly in terms of interest rates, fees, terms, and conditions. So, it's crucial for you to cast your net wide and consider multiple options.


You may be tempted to stick with your current lender, believing it's the easy and safe route. But, that's not always the smartest choice. You could be missing out on a better deal elsewhere. Remember, loyalty doesn't always pay off in the financial world.


Don't let the process intimidate you. Yes, it might seem overwhelming at first, but there are tools and resources that can simplify it for you. You can use online comparison websites, financial advisors, or mortgage brokers to help you sift through the countless options available.


Failing to consider all costs and fees


Another pitfall to watch out for when remortgaging is overlooking all the associated costs and fees.


It's not just about the mortgage rate, you've got to take into account the entire financial picture. You might be lured in by a low interest rate, only to find that the arrangement fees are sky high.


Keep your eyes open for costs like valuation fees, legal fees, and early repayment charges. These can add up quickly and turn what seemed like a good deal into a costly mistake.


Don't forget to factor in the cost of moving to a new lender, if you choose to do so. There may be exit fees from your current lender and setup fees with the new one.

It's important to do your homework and calculate your total potential expenditure before making a decision.


You may find it helpful to use an online remortgage calculator to get a rough idea of the costs involved. By considering all costs and fees, you'll be in a better position to make an informed decision.


Being unaware of hidden clauses in the remortgage agreement


While you're diligently adding up costs and fees, don't overlook the fine print in your remortgage agreement, as it may contain hidden clauses that could trip you up. These clauses are often buried deep in the contract and can have a major impact on your financial situation.


These hidden clauses can include things like early repayment charges, which are fees you'll have to pay if you want to pay off your mortgage earlier than agreed. They could also include clauses that tie you into the mortgage for a certain period, during which you can't switch to a better deal without paying a penalty.


Moreover, be aware of 'collar' clauses. These stop your interest rate from falling below a certain level, even if the Bank of England base rate drops. This could mean you're stuck paying a higher rate than necessary.


Don't let these pitfalls catch you off guard. It's crucial to read the entire agreement thoroughly, and if there's anything you don't understand, ask for clarification. It's your right to know exactly what you're signing up for.


Not seeking professional advice


Navigating the complex world of remortgaging without professional advice can lead you into costly pitfalls. You're dealing with intricate financial concepts and legal jargon, which can be overwhelming.


A professional can help demystify this process and guide you towards the best decisions for your situation.


Don't underestimate the value a mortgage advisor can bring:


Expertise and Knowledge:

Professionals are well-versed in the intricacies of remortgaging. They're up-to-date on the latest market trends and regulations. This expertise can help you:


  • Avoid unfavorable terms and rates

  • Understand the implications of various mortgage options


Saving Time and Money:

While there's a fee involved, the long-term savings can outweigh this cost. A professional can:


  • Negotiate better terms, potentially saving you a significant amount over the life of the mortgage


  • Streamline the process, saving you precious time and reducing stress


Avoiding professional advice when remortgaging can be a costly error. It's worth investing in expert guidance to ensure you're making the smartest move for your financial future.


Rushing into a remortgage without proper research and planning


Just as it's vital to seek professional advice, it's equally important not to rush headlong into a remortgage without thorough research and careful planning.


There's a lot at stake when you're dealing with your home, and making a hasty decision could lead to financial pitfalls down the line.


Consider this: you wouldn't buy a car without comparing models, checking reviews, and negotiating price, right?


The same logic applies to remortgaging. It's crucial to explore your options, compare rates, understand the terms, and assess your financial situation before making a move.


Be sure to keep an eye on the market trends, too. Rates fluctuate, and a seemingly great deal today mightn't be the best tomorrow.


Don't let attractive offers blind you to potential risks. Investigate thoroughly, ask questions, and don't sign anything until you're completely comfortable with the terms.


Frequently Asked Questions


What Is the Typical Process for Remortgaging a Property?


You'll first need to assess your financial situation and property value. Then, research potential lenders and mortgage deals. Apply for the remortgage, and if approved, you'll work with a solicitor to finalise the new mortgage.


How Does My Credit Score Impact My Chances of Getting a Remortgage?


Your credit score significantly impacts your remortgage chances. If it's high, you'll likely secure better rates. If it's low, you might face rejection or higher interest rates. So, it's crucial to maintain good credit health.


How Can I Determine if Remortgaging Is the Best Financial Decision for Me?


To determine if remortgaging is your best financial decision, you'll need to assess your current financial situation, research current mortgage rates, consider any potential fees, and consult with a mortgage broker


Can I Remortgage My Property if It's Currently on Lease or Rented Out?


Yes, you can remortgage a leased or rented property. It's called a "buy-to-let" mortgage. However, lenders evaluate your eligibility differently, often considering the rental income you're earning from the property.


Conclusion


In short, it's crucial to avoid mistakes when remortgaging. Don't rush into it without comparing lenders and deals, and make sure you're aware of all costs, fees, and hidden clauses. Seek professional advice to guide you through the process.


By doing your homework and planning carefully, you can dodge pitfalls and successfully navigate the remortgaging journey. Remember, it's all about making smart, informed decisions to protect your financial future.


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