Even Watchdog touched on the promotion of certain products
from lenders offering low rates but with the relevant lender arrangement fees
‘soaring by up to 70%’!
As I keep saying, a mortgage is the biggest debt you are
likely to ever take on and you need to do your homework, check the fees and do
your sums!
That’s the benefit of using a professional mortgage
brokerage that will look at the overall cost to you over a period of time, not
just the promotional rate from day one.
If it’s a 5 year fixed rate deal, they will look at all the rates
available and recommend according to the most cost efficient over the five
years. It is crucial to take into account the lenders upfront fees, arrangement
fees, booking fees, reversion rates (the rate you will be allocated after the 5
year ends), and any costs in changing your mortgage thereafter. And, of course, ensure that you use an
advisor that can access thousands of mortgages available, at the same time, to
cost compare and save you traipsing around all the banks and building societies
to see their individual offerings.
Watchdog also suggested that the average person changes
their mortgage once every seven years!?
That was a shock to me. Again, a
reputable mortgage brokerage would seek to review mortgages a lot quicker than
this. Why would you stay on the lenders
variable rate, after the promotional rate had ended, if there was a more cost
effective rate available with another lender saving you money? Always think of number one and show no
loyalty. You can be certain that lenders
will not remain loyal to you when it comes to raising rates as we have
witnessed with a number of recent increases in Standard Variable Rates. Seek advice and save money!
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