Free Mortgage Review

With the mortgage market going through some very profound changes, now is the time for consumers to consider reviewing the mortgages they have chosen. With the Standard variable Rates (SVRs) of many variable mortgages increasing rapidly, homeowners would be prudent to approach a professional for a mortgage review. The current climate is going to have a greater impact on those with a variable mortgage than on those with a tracker mortgage as the base rate set by the Bank of England is not expected to rise over much more than 2.5% in the next three years, according to reports published in the Guardian newspaper.

Yet it seems that few consumers are aware of the concept of a mortgage review, despite that it could potentially save them a lot of money. It could be that people are paying too much for their mortgage without having reviewed it for some years. They may be unaware of the changes it has undergone since they first applied or, alternatively, if their variable or tracker rate has expired, they may be paying the lender’s SVR, which could be a lot more than others offered in the marketplace.

There are firms who charge a fee for a mortgage review, but there are growing numbers of those who don’t. Independent mortgage reviewers are not affiliated to any particular lender and can apply impartial judgement to a review without being obliged to sell any particular financial product. These reviewers can take their fees from the lender in the event that they secure a new mortgage on behalf of their clients. In the event that they are not able to improve on the client’s mortgage, then the client has lost nothing but a little time. For the sake of a few minutes of your life, a mortgage review could be a quick way to cut your costs considerably.

Here at 3mortgagebrokers we do not charge a fee for a mortgage review, please contact us here and a member of our specialist team will be in contact shortly or alternatively call us on 0151 448 7084.

Should You Pay a Broker a Fee?

Mortgage brokers act as the junction between those who want a mortgage and those who supply them. Traditionally, banks and other financial institutions have sold their own financial products. However, as the marketplace for mortgages has become more competitive, the role of brokers has become more popular and they are now the first port of call for many would-be borrowers. Their job is to source the right mortgage policy for their clients, after taking into account factors such as their financial stability and their credit history. Independent brokers have found the most favour with consumers as they are not loyal to any particular lender, and their industry knowledge can help them source mortgages that would otherwise be unavailable to the public.

Because of the competition in this field, consumers are now in a position to shop around and find the brokers with the lowest fees. There are brokers who charge a fee, whether they secure a mortgage or not and there are those who only charge if they manage to find their clients a suitable deal. The fees involved vary from broker to broker. However, there are also brokers who do not charge their clients at all. Instead, they arrange a fee with the lender who offers the deal most agreeable to the clients. In this way, brokers can benefit from not charging prospective borrowers any fees for their services. While this system can ally some brokers to certain lenders, independent brokers can still use their impartiality to find their clients the best deal and get paid in the process, without charging their clients at all. So the simple answer is no, you don’t have to pay a broker’s fee, but shop around before making the final decision as to which broker to choose.

Time to fix that Variable

Variable mortgages are amongst the most popular mortgages on the market, because of their comparative simplicity and easiness for most consumers to understand. The principles of variables are relatively basic: each lender sets his own Standard Variable Rate (SVR). Whilst these are in line with the base rate set by the Bank of England, they are not the exactly same as that base rate. This is where the lenders of variables make their money: by shadowing the Bank of England’s base rate, they can increase their SVRs if the base rate increases. However, if the base rate drops, they can mirror that drop but without plummeting so far as to jeopardise their profitability.

Whilst they are a relatively simple concept to understand, consumers with variable mortgages are more than likely paying interest rates that could be streamlined by seeking another lender. In addition, consumers who use variables are not guaranteed to reap the benefits that rate changes can offer, such as cheaper repayment bills.

For those looking to reduce their outgoings, there has never been a better time to shop around. With lenders mindful of taking on too much debt, some are actively encouraging borrowers to look elsewhere by offering incentives such as the waiving of redemption charges or even by offering to pay off a portion of the original loan. Whilst variables are easier to comprehend than other mortgages, the fact that they do not have to adhere entirely to the base rate might incline consumers to shop around. Which isn’t to say that variables are a bad idea; it may simply be that there is another lender who offers a better SVR than your current one.

House Prices Update

The prediction for house prices in 2010 seems to have divided the experts. Before the onset of the recession, the UK was enjoying a period of economic prosperity and house prices had reached unprecedented highs. However, many homeowners watched with dismay as, under the grip of the credit crunch, the value of their homes flat-lined and then plummeted in a comparatively short space of time. The marketplace became sluggish and, as people decided to hang onto their money, it came to a virtual standstill. So now, given that we are leaving the economic downturn behind us, what are the predictions for the housing market over the next 12 months?

Global real estate advisors, Jones La Salle believe that the recent rise in house prices is rooted in fragile economic fundamentals, such as the weakness of the pound boosting overseas investment and a boost from the stock market recovery. Bearing this in mind, they predict that the present recovery will “stall next year.”

However, Philip Harvey of Property Vision believes that with demand threatening to outstrip supply, house prices will rise in certain areas. They believe that: “Areas such as East Sussex and Kent, which have been lagging in the recovery, will benefit from this effect and there will be a direct impact on prices.”

Despite the different stances taken by economic experts, one thing is certain; the recovery of country’s economy is likely to be slow and we are not likely to see house prices achieved in the early part of 2009 returning in the immediate future.

Lenders Waiving Early Redemption Charges

For many, their mortgage has been a loan in which they have been tied into, unable to afford the redemption charges involved to allow them to shop elsewhere and get a better deal. Not only have the redemption charges prevented consumers from saving money on their existing mortgages, it has also prevented them from consolidating their debts. If the interest rates on an existing mortgage are comparable to or higher than the rates on their debts, there’s little point on considering debt consolidation of this sort. However, in the light of the recent credit crunch, the tables have turned in favour of the consumer.

In an unparalleled chain of events, many lenders have actually been offering sweeteners to the consumer to encourage them to take remortgages with other companies. These have taken many forms, but the one that could have the most impact is the waiving of redemption charges. One such lender is the Bristol and West. According to the Telegraph, they have written to 140,000 borrowers offering to waive redemption charges in the event that they want to take their business elsewhere. The offer is being made to borrowers on fixed rates of various lengths such as two, three and five years, but all are due to expire within 13 months, a spokesman said. Northern Rock, a well known mortgage provider has been known to also offer this option to their borrowers.

For anyone considering shopping around for a new lender, it seems that there couldn’t be a better time. With no redemption charges to pay and some lenders, such as the GMAC, even offering to pay off a portion of the loan, a remortgage could become a happy reality for many consumers, and the solution to reducing overall debts.

Debt Consolidation

Just before the credit crunch, the UK was experiencing a boom. This prosperous period caused many consumers to take out extra home loans, adopt extra credit card debt or renovate their homes. Once the crunch started to bite, some of these people found themselves staring at a mountain of debt that was bigger than they had expected it to be. Others faced the trauma and financial stress caused by redundancy, which resulted in the same situation right across the country.

If you’re looking at outgoings that are threatening to exceed your income, then maybe it’s a good time to consider debt consolidation. In short, you put all your debts together as part of one loan and the biggest loan you are likely to have taken out is your mortgage. Using debt consolidation, you can streamline your payments by looking for a mortgage that offers you better interest rates than those incurred by your other debts, and remortgage to include those sums within the loan. Using this system, you can save hundreds, if not thousands, of pounds in interest fees. In addition, if you shop around you might even be able to find a lender that offers you better interest rates than those offered by your current mortgage provider, saving you even more money.

However, debt consolidation is not to be thought of as an instant cure-all. At the end of the day, you are still borrowing money and that money still has to be repaid. The longer your loan exists, the longer you will be paying interest, so talk to an independent mortgage advisor to be sure that this is the best thing for you.

Right Time to Remortgage?

Your mortgage is probably the biggest single financial commitment in your life and meeting the repayments can be a stressful business for a variety of reasons. Choosing to remortgage, if done wisely, can save you a lot of money. In essence, you are simply moving your debt from one lender to another but, if you’ve done your homework, your new lender should be offering you a better deal. Before you consider taking out a remortgage, you could challenge your current lender as you may be able to get a better deal.

In addition to saving money, there are other times when you might want to consider a remortgage. You might be buying a larger and more expensive property, in which case taking out a remortgage for the extra money will allow you the freedom to do so. Alternatively, you might find that you have outstanding debts. If these debts charge a higher rate of interest than the one offered by your mortgage, then consolidating them under the umbrella of your mortgage can actually help to reduce your outgoings. Or, it might be that you’ve suddenly got some more money – perhaps a pay rise or an inheritance – and you want to make a dent in your existing debt, but your current contract won’t allow it. Taking a remortgage with another lender might allow you to make bigger repayments.

Since the recent economic downturn, lenders have become a bit more choosy about who they lend to. To be certain of having your remortgage application considered, you need to have a good credit history. A remortgage can help streamline your debts and, in the long term, save you money.

What would your family do if you were unable to work?

Are you the main breadwinner for your family? Is it you who puts the food on the table and pays for the roof over your loved ones heads? These days life isn’t easy for many at the best of times. How would the family cope if you found yourself the latest unemployment statistic, losing your job through the recession? What would you do? Would you have enough to get by over the next couple of months, let alone the medium to long term? Would you be forced to sell your home? What if your home isn’t worth as much as you’d hoped, maybe you’re even suffering from negative equity? Options as well as funds would quickly run out.

Are you insured against unemployment? You would be well advised to consider it: protection against the worst of times and comfort in the best of times knowing that all would not be lost if you lost your income.

Using that disposable income to protect your life and your home

Nobody knows what tomorrow might bring, what’s around the corner. That’s why insurance exists. Insurance is there to protect us against the unforeseen, the threats and the challenges of life. When it comes to your home and your family’s long-term security you can’t be too protective. Imagine if something happened to you - an accident, illness or worse. How would your family cope? Who would pay the bills and the mortgage? How could you keep things going financially in tough times or times of crisis?

Well instead of waiting until it’s too late, take action now. If you have any spare disposable income then invest it in the future, put it aside as protection for your family. As the old maxim goes, ‘Take out as much insurance as you can afford’. These are wise words, words that many smart homeowners were glad to have taken heed of when good times turned to bad.

The importance of life insurance

It’s important to provide for the safety and security of your loved ones. Not just for today but for the future. After all, how would your family cope financially in your absence? Things like the mortgage, the bills, council tax and all the rest. They all stack up. How would your family deal with the challenges? If you’re not there to contribute then who will and how?

Life insurance really is a smart move. As the old life insurance headline says, ‘Money if you die. Money of you don’t.’ If you do die then you’ve done the right thing and provided for your family and they will be taken care of financially. You can take comfort in that knowledge long before the insurance need come into effect. As well as paying out when you die, investment policies can also be cashed in during your lifetime.

Clearly the sooner you arrange a policy, the more value it will accumulate. Don’t delay!