Home Improvement Advice for Mortgage

More about Mortgages Do it Yourself Tips for Mortgage

Not looking to buy a house but want to take advantage of lower rates?

Re-mortgage/Re-finance

A Re-mortgage involves a switch of lenders or mortgage products. For example, you could change mortgage lender and/or you could take on a different mortgage product offered by your current lender. Re-mortgaging is on the increase as savvy borrowers become aware of cheaper mortgage products - at present, almost 1/4 of borrowing is for re-finance purposes. The attractiveness of refinance is often the potential to access lower interest rates resulting in lower monthly mortgage payments. A cheap way to borrow for things like home improvements, university for the kids, debt consolidation (credit cards etc).

Cost of Obtaining a mortgage

These vary widely between lenders and must be taken into account when considering a mortgage. Most lenders charge a fee to the potential borrower to cover the costs of a valuation of the property to be mortgaged, thus ensuring there is sufficient security. Most lenders charge fees for actually obtaining particular mortgages. The vast majority of lenders will charge a special fee when the mortgage exceeds 75% of the value of the property. This is known as the Mortgage Indemnity Premium. Different lenders use different names for it such as High Percentage Advance Fee, Insurance Guarantee Premium, Higher Percentage Loan fee etc. this fee is a one-off charge that buys an insurance policy, which protects the lender only. If you have your house repossessed and the lender can not recover the amount of money you owe them, they will make a claim on the insurance policy to make up the difference. It is a totally unfair charge as you have to pay to protect them and in any case the insurance company can still chase you for their money back! This would inevitably lead to an entry on your personal file with the credit reference agencies. There have been some changes recently to this fee with some lenders now not charging it in certain circumstances or only charging it when your mortgage is above a certain percentage of the value of your property. However please beware, some lenders will actually pay the fee for you but you could still be liable if your house is repossessed.

If you move home and even if you stay with the same lender, you maybe charged this fee again.

There is mounting pressure from brokers and other professionals to have this evil fee scrapped for now, but it does still exist in many cases.

Another cost that is important to remember is the monthly or yearly cost of buildings and contents insurance. A lender will insist that the building is insured, but we strongly recommend that both be covered.

The information provided to you above should give you a good foundation of knowledge to build on. Remember the more you know the more you will save.