And so another year begins, have you made any resolutions? If not, make one to review your mortgage! Now that the election is out of the way and we have a ‘clearer’ route to Brexit, lenders will look at their strategies for the next few years and I’m sure somewhere in those plans will be reviewing their rates and offerings to maximise profitability.
In the meantime, one lender has already reduced a 5 year fixed rate to under 1.5% with free valuation, free legals on remortgages (£300 cashback for purchases). There will be other similar deals available, and terms obviously apply, but the fact that these rates are so low so early in the year is impressive!
Technology will play a huge part in the mortgage market over the coming few years. I’m sure mortgages will be available through a full ‘comparison type’ model shortly. But it does not necessarily mean it’s the right option for you. As with some current comparison sites, some of the options provided are those that pay a referral fee to the site and may not be the most suitable for the end user (although they might pay the highest referral fee to the providing site!).
We understand that a straightforward customer who fits the high street with 2.4 children, lived at their current address for ten years, has consistent employment, no debts and wants to remortgage pound for pound, will be an ideal customer for the technology model. However, not everyone will fit this model and thus the human touch will be required for some years yet.
And of course, this is all relying on you having a decent credit score. You can’t turn on the TV without seeing an advert for your free credit score! This is an assessment on all available financial information and calculates a ‘score’ for the lender. It also includes a search on your overall credit history covering, in the main, all of your financial transactions over the last few years.
Most lenders credit score applications to try and assess your ability to repay any loans. Nearly all financial institutions will register a credit search against you. So, if you have recently updated your car insurance, home insurance, taken out a mobile contract and just got a new credit/debit card, that’s probably four searches in a short amount of time! So even before starting the full mortgage process, have a chat with a professional adviser and seek their advice what to do and when, to enable the best chance of getting a mortgage first time.