Reasons Homeowners Should Remortgage Sooner Rather Than Later
Homeowners might want to take notice and start taking into consideration a remortgage as there are perhaps more reasons than not to get a deal sooner rather than later. The reason homeowners usually seek out a remortgage is to save money. No one wants to pay out more money than necessary and if a homeowner allows their mortgage deal to end without a remortgage they may find themselves paying out way more than necessary.
When a homeowner’s mortgage deal ends they can get a remortgage or allow their term to end. Their lender will take the loan that has a lapsed mortgage and switch it to the lender’s standard variable rate (SVR). Currently most lenders have SVR levels that are twice the level of interest rates that were offered to mortgage and remortgage seekers two or more years ago. This means that a homeowner could find themselves paying an interest rate that is higher by double or more than what they are used to paying.
Beyond the opportunity to escape a SVR and secure a lower interest rate, there is also the push to remortgage currently due to the fact that many lenders are backing out of offering remortgage lending. This means fewer lenders and fewer remortgage products to choose from. Less competition can mean a loss of competitive offers.
One such lender is Tesco Bank which will be selling off their £3.7 billion mortgage book comprised of 23,000 customers. Those customers will soon have a new lender.
Without the current competitive environment, homeowners will find less attractive deals and incentives offered with remortgages.
For those that have had their current mortgage end and are on a SVR and those close to having their mortgage deal end, experts suggest the first step is to shop around and discover how much of a savings a remortgage could offer. Look at the overall savings a deal can offer along with any fees for only then can a savings be truly revealed.
There are many reasons to remortgage and those reasons are growing. Sooner rather than later is good advice for most homeowners considering a remortgage.