Making Your Mortgage Work - Loan, Remortgage, Secured

Shop till you drop

Anyone looking to move house could save thousands of pounds by taking the time to shop around for the best mortgage deal. But even if you are not moving, you may well find that changing your mortgage or remortgaging could mean big savings over the years. Remortgaging, either with your current lender or a new one, could also enable you to free up cash, which can in turn be spent on home improvements.

Many people are still on old mortgages or are now paying a SVR simply because they have not thought about or had time to check out the better deals. If you are one of these people, stop now! You are probably spending money you do not need to be spending. For First Time Buyers (FTBs) making that giant leap onto that property ladder, lenders will often be more lenient about how much they lend – after all, it is better for the housing market if there are more people using it!

Movers and shakers

If you are a bit of a mover and a shaker, watch out for products that carry Early Redemption Charges or Early Repayment Charges. Lenders may charge you if you back out of your mortgage deal within a specified number of years and many who offer shorter term low rates may include an overhang, which means you may not be able to back out without paying a fee even when the offer period is up. If you are likely to want to change after a couple of years, avoid ERCs at all costs!

TIP: Many products with low introductory rates are likely to carry ERCs to stop you moving once the offer period is over. Particularly avoid ERCs that go beyond the offer period or carry an overhang.

Paying it back

Nowadays, there are lots of regulations in place to make sure that lenders do not sell mortgages that people simply cannot afford. However, it is also down to the borrower to be honest and responsible about what they can and cannot take on. Make sure you are honest about your annual income. You could end up getting into trouble whether you are on a variable rate or not. And, at worst, find yourself and your family without a roof over your heads, or with a criminal record for fraud.

TIP: Think about how you are going to repay the mortgage capital. Decide how you are intending to repay the capital and make sure that you act accordingly. Do not just put it off as a problem for the future.