How to Negotiate a Remortgage Deal – So You Don’t Get Rinsed!
Remortgages are becoming more and more popular for a variety of reasons. Some customers want to remortgage to obtain a further advance and release equity from their properties, some want to secure their loans and credit cards against their homes and other want to benefit from lower interest.
Another reason that people may seek to remortgage is to switch from interest only to repayment(capital and interest), or vice versa. Interest only mortgages have lower monthly repayments, but you don’t own the property at the end of the term so some people prefer to switch over part way through the term.
The difficult part when seeking a remortgage is being able to negotiate a better mortgage contract than your existing one and we’ve put together these tips to help you negotiate like a professional and get the best deal possible.
The first step that you need to take is to get yourself familiar with your existing deal so that you know what you’re trying to beat. Your fixed term may have finished and so you need to know what the new interest rate is once the initial period ends.
By getting familiar with your existing mortgage, you’ll be able to start comparing what you’ve already got against deals out in the marketplace and you’ll know instantly what is a good deal in comparison to your existing mortgage.
You may want to get advice from a mortgage professional, as you can use their knowledge to sniff out the most competitive mortgage deals. They have knowledge, expertise and contacts that you otherwise wouldn’t have access to, and this can really make a world of difference.
You can also get lenders competing against each other to push the costs down. Start by getting mortgage quotes from at least three lenders, and then use these to try and get a good deal from other lenders by proving that you can get a better rate elsewhere. They might just try to beat your quotes.
Don’t just consider the interest rate that is on offer with each contract. Take into account what fees are payable too, as high arrangement fees could mean that the contract isn’t as cheap as it first appeared. Some lenders may offer low or no fees, so consider this.
If you have managed to build up a large sum of equity in your home, make sure the lenders know about it straight away. Many people cannot afford to pay a large deposit, and with the recent property market crash many more have fallen into negative equity, so this is a great point for negotiation.
Try the old fashioned way of working too. If you go and sit with a lender and have a discussion, you may find that the personal approach will have customer services reps bending over backwards to try and beat other deals – after all many are commission based so they want your custom!
Timothy Frodsham writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.