Preparing you for life’s big decisions
There are all manner of life events that cause us to consider moving home throughout our lives. For example, you could be:
Raising a family
Moving to a new school catchment area
All these situations will mean there is a material change in your financial position, so there are points to consider before you make your final plans.
1 Your existing lender may not offer the best mortgage
Humans can be creatures of habit and if you’ve received a good service from your existing lender then it is logical to go back and see if they can help you. However, the complexities of the mortgage market means deals are constantly launched and withdrawn, so your current lender may not be able to provide the best deal for you in your individual circumstances.
Using a mortgage broker like PreMortgage gives you access to a much broader range of mortgages, including specialist mortgages designed for people with complex circumstances. Plus, if you decide to go direct and don’t get your application approved, you may waste valuable time contacting another lender and miss out on the property you’ve been looking for.
2 Your insurance & protection requirements will change
Obviously, if you move home you will have new home insurance requirements. But as moving home often ties in with a changing life event, there will be probably be other areas of your life that you will previously have considered, but which now require attention. For example, if you’ve recently married and had a child, but don’t have life insurance, you might want to protect your loved ones.
Alternatively, if you’ve changed your job since you last reviewed you insurances, your new workplace benefits package may not provide the cover you need.
Even if it isn’t a subject you necessarily want to contemplate, it’s important to remember why you’re making these changes and to protect the people that matter most to you.
PreMortgage can conduct a full review of your protection arrangements to ensure you have appropriate cover in place to protect you and your family.
3 Where do you want to be in 5, 10 or 20 years time?
For example, if you’re moving home because you’ve just had your first child, you may want to be at the same house for the next 18 years until they leave for university, or you may want to move when they start secondary school, or you may see yourself having several more children and requiring more space in less time than that.
The point is that thinking strategically about where you need to be can drive your decision making and see whether unnecessary costs can be avoided. It should also tell you which features you need in your mortgage to meet your long term goals – low early repayment charges or repayment holidays for example.
PreMortgage’s consultants don’t just type your details into a search programme and get you the cheapest deal. Our service is personalised and we know that asking strategic questions helps you and us design your mortgage requirements to avoid unnecessary costs and give you the certainty or flexibility you require from your deal.
4 How much will it cost for ?
The main costs you might face when remortgaging are excluding Free Mortgage Advice:
Early repayment charges
ERC’s are a penalty for leaving the mortgage before it comes to term, often calculated as a percentage of your loan value. Your lender will be able to advise you on any ERCs that apply.
Average cost 1-5% of mortgage. So an outstanding balance of £100,000 could incur a charge between £1,000 to £5,000
Lender’s arrangement fee
The administrative costs of organising your mortgage. This could be a flat fee or a percentage. Your lender will be able to advise of arrangement fees that apply to your mortgage.
Average cost: £0 – £2,000+
Higher lender charge
If the mortgage you are taking out is a sizable percentage of the property value (typically >90%), lenders may add a charge to insure themselves in case you default.
Average cost: 1.5% of the mortgage, so £3,000 on a £200,000 mortgage.
Cost of hiring a surveyor to assess the property’s condition and value
Average cost: £150 – £1,500 depending on the value of the property
Cost of hiring a solicitor for the process of preparing the deeds and carrying out the conveyancing process.
Average cost: £500 – £1,500 plus VAT
An one-off application fee for the mortgage, “booking” or reserving the capital while processing your request
Average cost: £99 – £250
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT.