Deciding between Remortgage offers

Remortgages are varied and there can be many different remortgage offers to choose from.  Cyphering out which ones you truly want from ones you don’t can at some points be confusing.  There are things to decide such as whether you want a fixed rate remortgage or a tracker remortgage.  There are also other considerations that should be kept in mind when it comes to deciding between remortgage offers.  Below is a partial list of some of the factors that could help you decide between one remortgage and another:

 

·         How is interest compounded on the remortgage?  If interest is compounded daily then you are paying less in interest payments than if it is calculated annually.  When interest is calculated daily it means you are paying interest only on the amount you owe and every time you make a repayment you are paying less in interest.  If it is calculated annually then you are paying interest on the same amount for an entire year and it will not lower until the next 12 months calculation.  The difference may be important to you and if it is then it is important to ask when considering a remortgage.

·         Will the remortgage allow you to make overpayments?  Being able to make overpayments without penalty can be a strong feature in making one remortgage stand out from another.  If this is a feature you want then make sure you find a remortgage that will allow you to make overpayments.

·         Are there any fees for taking the remortgage?  There are often administrative fees attached to remortgages.  These fees can range from low acceptable fee levels to extremely high and outrageous.  The most outrageous fees are usually associated with very low interest rates.  The interest rate savings is then negated by the high cost of the fees.  Fees to remortgage should be discussed and questioned up front and be taken in as a true cost of the overall remortgage and valued in when determining what savings will be had by securing a remortgage.

·         What will the cost be if you end the remortgage deal early?  In the event you decide to remortgage again before this deal ends there will likely be fees associated with ending the deal.  It is always good to understand what penalties could be put upon you should you decide to get another remortgage early.  This is especially important if you have an expectation of a change in the interest rates in the future and would want to take advantage of an offering of a lower rate.

   

Lenders try to offer up a wide variety of remortgage products to meet the special needs of homeowners.  Some items associated with a remortgage could be negotiable so it doesn’t hurt to ask when considering a remortgage.  Remortgage brokers when told what things are important to your needs will try their best to find the remortgage deal that meets those criteria.  There is not likely to be a perfect remortgage deal but there is always the possibility of a great one that meets the majority of your unique needs.



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