Mistakes to avoid when reviewing your mortgage
Mistakes to avoid when reviewing your mortgage
Mistakes to avoid when reviewing your mortgage.
Your mortgage is probably the biggest financial commitment you’ll make so it’s really important to try and do things right. Even small mistakes could cost you hundreds if not thousands of pounds. Here we try to highlight the top 4 common mistakes and how to avoid them.
- Going onto your lenders Standard Variable Rate (SVR)
When your mortgage deal comes to an end, your lender will usually move you onto their SVR. This rate is generally higher and your monthly payments will increase. For example, £200,000 over 20 years on a rate of 2.49% would cost you £896.23 per month. By not reviewing your mortgage and being put onto the SVR at a rate of 6.99% your monthly payment would increase to £1515.98 per month. The average 2-year fixed rate (Feb23) is currently 5.14% so a clear saving to be made. To avoid moving onto your lenders SVR it is a good idea to start looking up to 6 months in advance and get a good rate locked in.
- Underestimating associated costs with a purchase or remortgage.
A common mistake is to focus only at the interest rate but you should also consider other factors such as lender fees, valuation costs and Solicitor’s costs. Each lender will have different costs some may be included for free whilst others you will have to pay for upfront. Also if you have any plans to move in the near future ensuring your mortgage is portable becomes an important factor.
- Not Shopping around for the right deal
Lenders will generally get in touch to confirm their SVR and offer a potentially attractive sounding new deal. By shopping around however you may be able to transfer to a new lender with better rates available which leads onto the final and maybe most important mistake………
4.Not getting independent mortgage advice
Now of course we would say that but a simple way to avoid these mistakes and others is to seek advice. As a mortgage broker we will sit with you to understand your circumstances and needs, and then search the market for the most competitive deal. We also have exclusive deals not available on the high street. Call us on 01275 244360 so that we can arrange a no obligation discussion.