Remortgaging – Important Considerations

Even if you have found the best remortgage deal there are important considerations you must take.

1. Early Repayment Charges – When you take out a remortgage deal you must make sure there are minimal early repayment charges should you decide to pay off the mortgage early. This is one of the factors you must check before remortgaging.
2. Does the lender charge interest daily – This will have an impact on the total amount you pay back?  With daily interest being calculated, the amount you owe is being recalculated every time you make a payment.  When you owe less money then you pay less interest. With interests calculated annually then your interest will not go down until after 12 months of repayments.
3. Moving homes during the mortgage term – Make sure that if you move homes you can carry the deal with you, these are usually called Portable Mortgages.
4. Overpayments – Make sure the lender allows you to overpay or take a break from repayments. If for example you wish to pay back the mortgage earlier, make sure the lender allows you to do that and also if you want to take a break from repayment due to financial difficulties or unemployment then make sure the lender allows you.
5. Eligibility – Before remortgaging, you must make sure you meet all the criteria such as income level and status of employment and ask what will happen if your status change on these areas.
6. Check Products – Some mortgage deals are actually not available for remortgaging but only to first time buyers.
7. Loan To Value (LTV) – You need to find out the loan to value of the new mortgage. Most mortgages allow you to borrow up to 75% of the equity in your home.  The best rates are 60% loan to value.

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