For many of us, a mortgage is the largest financial commitment we will make in our lifetime, and yet many of us are unaware of the options available to help make repayments much more cost effective.
Many clients have been content to let their initial fixed, tracker or discount product rate expire and move on to the lenders variable rate only really reviewing the mortgage when rates start to increase.
Many are not aware that rates have already started going up, and complacency can cost a lot of money in interest charges. The option to remortgage may provide a better option, rather than paying the standard variable rate of your current lender.
A mortgage review will look at what you’re currently paying and run a comparison against what else is out there.
What’s in the guide?
• Why you should think about remortgaging
• How the remortgaging process works
Why should I remortgage?
Remortgaging basically means moving your existing mortgage from one lender to another.
There are many reasons contractors, business owners and independent professionals may want to remortgage. The mortgage market is ever changing, and it could be that you’re paying a higher rate than you need to. The original low interest rate you signed on with may have switched to a higher one, potentially leaving you out of pocket.
However, it is not always about saving money, it could be that your contract rate has increased, or you have recently inherited some money. Earning more or having more available cash means that you will potentially be able to afford higher repayments, saving you on interest paid overall.
A change in job or lifestyle may mean that there are periods where repayment pauses may be needed, so finding a provider that offers flexibility and/or ‘payment holidays’ may also be needed.
Whether you want to find ways of cost-saving by moving to a more competitive rate or using it to release equity on your property to fund home improvements, consolidate debt or invest in another property, then remortgaging is a financial conversation worth having.
How does it work?
Qualifying for your remortgage via a specialist broker could not be easier. As a specialist service for contractors, business owners and independent professionals we have negotiated special contract-based underwriting with certain high street lenders.
We can either use your gross annualised contract rate or your limited company accounts to assess the best option for you and how much you can afford to borrow. This ensures the amount you can borrow is based on what you actually earn, rather than what you draw as an income. Rather than looking at the income you took from your business, we could use the contract rate you charge to work out how much you can borrow.
Doing this allows you to borrow more, because any tax saving methods that you employ won’t be taken into account when calculating remortgage affordability
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