As I have said before and with the run up to
year end, lenders have been actively looking at their offerings and loosening
their criteria, positively. Some rates have even been reduced and nearly
all re-mortgage deals now come with a contribution to valuations and legal fees
to keep the cost of changing lenders to a minimum. There’s no excuse to
be sitting on a high rate when you don’t need to be!
Also, BEWARE, that some lenders are sending out
letters to those coming to the end of their product term offering them new
rates, but giving them a deadline in which to switch. We had one customer
recently who was four months out from their current rate changing from a fixed
rate and moving on to the lenders Standard Variable rate. They were
offered some great new rates to stay with the lender, but had a deadline of
just two weeks in which to accept, even though the product wasn’t changing for
four months! This is not acceptable, no one should be pressured to accept
a deal and we have passed this example on to the industry trade body to take
on. However, some customers might accept this and go with the deal.
What if rates decrease in the next three months? You’d be annoyed.
Read the small print, do not panic and get expert advice.
And finally, do you look at your financial
budgets frequently? A report from a well known credit referencing agency
has suggested that over 78% of mortgage people surveyed are not currently
budgeting for a rate rise. We all know rates will rise at some point,
probably after Brexit now, but nobody knows when this will happen! Many
people asked did not know how much a rate rise would cost them on a monthly
basis, despite many respondents believing rates would rise over the next twelve
months! A 1% rise on a £100,000 mortgage can increase the monthly payment
by as much as £83. As we go in to some
months of uncertainty, and especially with regards to the cost of funding
within the mortgage market, do make sure you are ready for all eventualities.
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