The COVID-19 pandemic has drastically impacted the economy, disrupting people’s finances throughout the UK’s financial markets. Although many financial markets have struggled to maintain cash flow, the housing market is looking up. Those looking to start the long process of buying a home may be an unpredictable one–but remortgaging can be a beneficial switch.
This article will provide further insight into the effects of the pandemic and how to receive the best-remortgaging rates and offers.
Before and After COVID-19
The pandemic carried a heavy burden of financial instability well into the year 2022. The recent surge in inflation has put the economy on a pivot–and that’s no different with the housing market. In early 2020, 30-year-fixed mortgage rates were stunningly low, as well as interest rates. These historic lows have just begun to rise again drastically.
For example, the Scottish Housing market mortgage rate in 2020 was 1.48% by May 2020. Now it has risen to an astounding 2.78% in 2022. Although we can assume that these rates may increase well into the end of the year, waiting for rates to climb back up and fall may not be the best solution. As we are still in the beginning stages of recovering from the pandemic, there is still much to consider when moving forward.
Changes in Remortgage Rates
The pandemic not only impacted the way we work, but it led to the complete collapse of jobs throughout the country. Many people who lost their jobs benefited from the early pandemic interest rates. As of 2022, interest rates have risen from 1.25% to 1.75% to the Bank of England. These rates have been historically high since 2008 and do not appear to be going down anytime soon. Despite this concern, it won’t last forever. Rates are expected to fluctuate to match the economic market. With inflation at an all-time high, it’s best to think effectively about your choices.
- Variable Rates. The lowest current variable rate is around 3.47% from Beverley Building society.
- Fixed Rates. Three, five, and ten-year fixed rates range from 2.99% to 3.34% interest. Depending on which one you select, a deposit can be as low as 20% upon signing.
- Personal Expenses. Factor in your expenses and income when deciding on the best rates. If applicable, taking the opportunity to close in on the lowest deal at the time will be in your best interest. If you can afford the monthly price, you will still have to prove to the lender that you are capable of paying the monthly cost.
Time is of the Essence
As mentioned above, waiting for rates to fall can become wishful thinking. Proper timing is essential when closing in on a deal to benefit from refinancing your mortgage. Here are a few things to questions to ask yourself before remortgaging:
- Do you prefer a short-term mortgage to a long-term?
- Are you looking to lower your monthly prices?
- Have you had a drastic change in income?
- Do you plan on accepting an offer from your current lender?
- Are there any (hidden) fees?
- What type of mortgage do you currently have and want in the future?
- Do you have any credit report discrepancies or loan debt?
These are questions your mortgage advisor may ask you to understand your situation better–it’s helpful to understand them yourself.
Tips for Remortgaging Your Home
Getting started can feel overwhelming. What do you know about remortgage rates and where can you go to learn more? Often, the best thing to do is jump right in.
Understanding the market and its trends is the best way buyers can stay ahead of the curve and see how their mortgage may be affected by current situations. This is especially important if you’re using variable rates to pay your mortgage.
Turn to the Experts
Mortgage advisors help navigate the market for you. Conducting your research is essential, but the experts such as Prestige Mortgage Solutions can find the best potential opportunities, negotiate with lenders for the most reasonable price, and find many current mortgage rates. We cater to the Scotland area as well as the greater London region.
An alternative to remortgaging would be to take out another. Confused? You could potentially take out a second charge mortgage. A remortgage allows you to use the equity of your home as security. While it may seem intimidating, this option may be well suited for anyone who has reached the end of their current mortgage deal and, in order to leave that deal early, would need to pay an early repayment charge.
Contact and Speak to Your Current Lender
Be sure not to wait until the last second to communicate with your current lender. After conducting research and speaking with an advisor, they can lay out the best place and advice to assist you with moving forward.
Although not much of a concern in the current climate, be aware of in-person demands when closing on a deal. Closing early–and taking the best opportunity available–can leave less time for research. Some physical offices may be closed due to the effects of the pandemic, so be aware of e-signings. Have the proper documentation available online if necessary and speak with a mortgage advisor in Scotland who can help.
Getting the Best Deal
Unfortunately, some of the best mortgage deals after 2020 have disappeared. Those looking for a cheaper option may have to contact mortgage assistance services to divvy their possibilities. Remortgaging may still be the best option if you can not only afford and keep up with your current payments but also if you want to opt into a new deal. Suppose you’re going to negotiate your opportunities and feel less confident about the market’s rising tide. In that case, it may be best to consult an advisor, do the research, and remortgage once the market stabilises.
If you reside in the UK, especially the Scotland area, and need further assistance at any stage in the mortgage and remortgage processes, we are here to help! We understand that the financial jargon is overly dressed with unfamiliar terms, which is why Prestige Mortgage Solutions can help to make sense of the process. For mortgage advice or tips for getting approved, call to speak to one of our representatives.
If you’re looking for a mortgage advisor in Scotland, we’re here for you! We also provide services to make home buying, insurance, and helping you save money along the way.