Choose Financial Stability Over Loyalty to Lender in Remortgage Shopping

Choose Financial Stability Over Loyalty to Lender in Remortgage Shopping

Homeowners have shown demand for remortgages in the effort to save money in the midst of rising interest rates causing higher repayments. Without a remortgage at the end of a mortgage term, a homeowner is moved to their lender’s standard variable rate (SVR). The risky SVR could not only be connected to a higher interest rate than what is found with a remortgage, but it is subject to further rate hikes. A fixed rate remortgage choice could have a better interest rate and shield from any further interest rate increases ahead. 

Experts repeat the same advice throughout their warnings to homeowners to not be caught off guard with rising rates. A remortgage could be very helpful in not only saving money but in keeping repayments affordable. They also encourage homeowners to push aside any loyalty and instead shop around to find the very best remortgage deal.

Choosing the best possible remortgage is essential in making it through the months ahead. There are more interest rate hikes expected, inflation will continue to have an impact, energy costs could get even more expensive, and property values are expected to decline. There could be a recession. Many forecasts expect that homeowners could see a loss of double digits of their property value. Unfortunately, that isn’t everything that could be negatively impacting a household budget, so heeding the warnings of experts could be a smart strategy.

If property values decline there are many worries, one of which is a homeowner could see their house value fall below the level of debt. This is called being in negative equity. There are financial issues that occur when a homeowner falls into negative equity, of which one is being out of reach of a remortgage and all the benefits a new deal would bring to protect one’s budget.

Another issue with declining values is the homeowner’s loan to value (LTV) changes and lenders use LTV along with other criteria to determine which deals a homeowner is offered. Some lenders will not consider offering a homeowner a remortgage if their loan is greater than 80% that of the property value. It could leave a homeowner having to pay down debt to bring it within reach of an available LTV level remortgage. Also, the lower the loan to value, usually the better interest rate offerings with a remortgage.

Because declining property values could reach double digits this year, homeowners are seeking remortgages sooner rather than later to be offered better deals than they might later one. Rather than pay more than necessary, they are choosing remortgages now rather than later when interest rates could be higher. Also, instead of being stuck with a risky SVR, homeowners are seeking relief and protection from further rate hikes by choosing a remortgage.

There are many benefits of remortgaging, including but not limited to the ability to cash out equity should the homeowner feel safe enough to do so and use the funds for any expenses or needs. Some homeowners have reported using the cash to make improvements and upgrades to their home energy systems to save money from rising energy costs. However, the homeowner can use the money as they wish for whatever need or expense.

It is obvious to not only experts, but homeowners as well, that a remortgage could be helpful. Some homeowners might not be aware of how to start the process and begin shopping for a remortgage deal. It is easy to do online. One simply must visit a remortgage lender website and obtain a quick quote. Most offer this service so a homeowner can shop when convenient and from home or on the go. Visiting other remortgage lender sites will offer quotes to compare. 

Choosing to remortgage shop with a remortgage broker is even simpler. Visiting their website will offer many quotes from a variety of lenders in which to compare. Brokers could also have exclusive deals to choose from not offered directly from a lender.

Another piece of advice for a homeowner is to push aside any loyalty to one’s current lender. This is the time to seek the best deal, to acquire relief from further rate hikes, and obtain a repayment level that is affordable while dealing with all of the financial strains presently taking a toll due to the current economy. 

It is understood that it is the lender that gave you a chance to purchase your home, or offered you a remortgage that was better than other choices. Maybe you have been with that lender for many, many years or it is the lender your family has always worked with, but there could be a better deal awaiting. One that saves you more money. A remortgage with more incentives, a lower interest rate, and perhaps a longer term. 

Loyalty to a specific lender is the least of the criteria a homeowner should consider now. Instead, place loyalty with your financial future and make sure your family gets the best opportunity possible in remortgage lending.

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