Our calculator will help you to decide whether an IVA is right for you.
In the middle of financial difficulties, re-mortgage solutions can prove to be a great option. The best rates of interest are available for those people who have handled their debts well in the past. The current credit crunch means that banks have become more reluctant to lend money; however, if your credit history is good, you may have little difficulty securing a re-mortgage against your property. As with obtaining any mortgage, many deals are available, but you will need to search the market to find the best product for you.
Obtaining financial advice can prove to be highly advantageous when planning ahead. It may take a few months of searching to find the right product and if you have an existing fixed-rate mortgage, it is important to start searching a few months before your fixed-rate deal ends. This will help to avoid any large increases in interest payments that can often amount to several hundred pounds.
Another step that needs to be considered wisely is ensuring that you can afford the repayments of any re-mortgage solution. It is essential that you have sufficient surplus to cope with any increases in interest rates. Fixed-rate and tracker mortgages can help to protect against rises in interest rates, but it is always a good idea to keep some funds in reserve if you are able to.
You should also consider any early repayment penalties. Fixed-rate mortgages in particular often have an early repayment clause. In the industry, these are usually termed as a “redemption penalty” or “early repayment charge”. These charges are intended to allow the lender to make up some of the interest lost when you pay off your mortgage early.
It is crucial to find out the various costs involved in taking any re-mortgage solution. Just like a new mortgage, there are a large number of costs that are linked with the service of re-mortgages. There are various variable-rate mortgages that come without the arrangement fee. But it has also been found that most of the fixed-rate mortgages carry this fee. In case you are planning to pay the arrangement fee, it is worthwhile to take the fixed rate one as will provide you with a peace of mind. However, if the rate of interests drop down, it may be a possibility that you may be required to pay much more amount that you would have paid with variable-rate mortgage. So, obtain financial advice from a bank or financial institution before making your decision.