On the 2nd August 2018, the Bank of England raised interest rates for only the second time in a decade, taking the base rate up to 0.75 percent. This means that the 3.5 million borrowers who are on variable and tracker mortgages could see their monthly bills go up as lenders look to pass on the costs* so is it time to consider remortgaging?
It’s vastly important that if you are coming to the end of your current mortgage deal that you plan ahead. You’ll need time to understand the implications and potential impact on the amount you could end up paying when you move onto a standard variable rate. Take action sooner rather than later!
Mortgage advisers will be on hand to help if you are unsure and they will usually suggest that remortgaging would be the best solution for someone in this situation.
Remortgaging is usually the best solution and can be used for many reasons:
- You’re coming to the end of your current deal
Once the deal ends on your current mortgage, you’ll probably be moved onto your lender’s standard variable rate which will usually be significantly higher than other rates you might be able to get elsewhere. Perhaps you’re due to move from existing mortgage and need to get a new remortgage deal or start a new fixed rate mortgage.
- Your deal’s no longer right for you
Your situation may have changed either personally or professionally, making it preferable for you to change the rate you are paying. Potentially you may want to increase the amount you are repaying, for example if you get a pay rise or perhaps you are thinking about retirement planning.
- You want to try to cut costs or consolidate debts
If you have built up a large amount of mortgage debt over time, then re-mortgaging could lead to large savings being made. However, it is critical you work out in advance what the ideal rate for you would be by seeking financial advice or talking to a contractor mortgage broker.
How easy is it to remortgage?
Getting any type of mortgage can feel tougher these days, and you shouldn’t rest on your laurels just because you’ve managed to get a mortgage from a lender before. This is definitely the case if you are no longer in permanent employment and your situation has changed. This is because lenders can struggle to understand how contractors operate their finances, and each lender will vary how they assess your income.
If you going to be getting a mortgage as a contractor, it makes sense to speak to an advisor who has experience at mortgaging or remortgaging for contractors.
Finding an adviser who specialises in contractor financial advice may save you time and money, because if you have an application declined it can have an adverse effect on your credit score.
If you’re looking at getting a mortgage as a contractor, then it’s important you speak to the right people and that they are regulated by the financial conduct authority. The more information you can supply on your limited company, the more likely you will be to secure a mortgage at rate to suit you.
You can often secure a new deal up to six months in advance of your product ending. It’s a good idea to get your mortgage application started early to give you plenty of time to go through all the necessary processes. You’ll need time to seek an adviser, approach your current lender and complete the application. This will help you avoid spending unnecessary time on a higher rate.
Blog written by: Jo Elwell – Financial Services Manager – Brookson Financial
How Brookson Financial Mortgage Team can help
Brookson Financial can often source mortgage rates that are not available to you directly. We can identify competitive remortgaging deals based on your specific circumstances. We also provide a free initial 30-minute consultation with no obligation, so you can be confident that our advice is honest, independent and specific for your needs. Call 0345 058 1280 or email firstname.lastname@example.org