Mortgage Calculators Easy As 1,2,3

By: Martyn Witt

First Mortgage Trust have developed a number of diverse calculators over the years not only to improve the quality of their clients online experience but also in response to client, consumer and third party requests. Among the calculators are Mortgage Payment Protection, Bridging Loans, Secured Loans, Buy To Let Rental and Mortgage Calculator, Affordability and budget, How much can I borrow, monthly mortgage payments for both interest only and repayment, flexible mortgage calculator and three conveyancing calculators for purchase, sale and purchase and remortgage.

The benefit of online mortgage related calculators are many and varied. First Mortgage Trust's extensive collection of online calculators allow client retention and leaves them in complete control. not only to compare current outgoings but also for anticipated costs and savings. Every cost associated with selling, purchasing and remortgaging is available and for the client to interact with. Mortgage calculators help to create a sticky website.

Calculators are of benefit to solicitors, Independent Financial Advisers, mortgage brokers and those involved in residential and commercial real Estate. The calculators can be used both online and offline for ease of reference to professionals. Other benefits are client and consumer retention as website visitors no longer have to leave a professionals site to confirm or check figures.

For Financial services web designers, webmasters and search engine optimization this becomes invaluable keyword rich content and is an essential must have for any associated site. With around 500,000 searches every month in the US & UK for 'mortgage calculator' this confirms the demand for information required by online clients.

First Mortgage Trust's conveyancing purchase and sale & purchase calculators include a database of approximately three hundred and seventy local authority search fees. First Mortgage Trust update this database annually. Although local search indemnity insurance is now popular amongst conveyancing solicitors it must be remembered that not all lenders will allow this and may well insist on a local authority search. Clients can also work out stamp duty, another substantial cost in the home buying process along with many other functions.

With the ever changing landscape of lending and underwriting criteria it is important that the consumer have calculators available to them. Many lenders have now increased income multiples to as much as 5.6 joint for high credit score, high earners. Before a client proceeds with a mortgage it is important that they have an idea of borrowing capacity, after establishing borrowing capacity they can further confirm monthly figures to confirm affordability.

It is also important that any calculator placed on a financial services website not only carries disclaimers but also keeps pace and reflects changes with legislation from a regulatory perspective. The Financial Services Authority have expressed some concern over the self certification mortgage. A non status mortgage whereby income is not verified by the lender. Therefore a mortgage budget and affordability calculator is essential along with hints as to why the consumer is self certifying their income, this is in accordance with responsible lending practices.

With rising property prices diminishing rental yields a buy to let mortgage and rental calculator also proves exceptionally popular. Where the amount of mortgage available can be reduced substantially by a valuers comments or rental assessment it is important that the client is forearmed.

Cash-Out Refinance Loans Are Really Such a Good Deal?

By: Kate Ross

Getting extra money when refinancing your home loan can be really tempting because it is a very cheap source of financing. But, is it really such a good deal? Does that money come for free or are there additional costs to consider? In fact, how much does refinancing really cost?

There are many variables to analyze in order to decide whether refinancing your home loan is to your advantage or not. The new loan terms are not the only things you need to consider. The previous loan’s terms will also have to be taken into account when deciding if refinancing your mortgage loan is a smart thing to do.

What Determines Whether a Refinance Loan is Onerous or Not?

Regarding the new loan, the terms you need to analyze are the following: interest rate charged, loan repayment program, resulting loan installments, administrative fees, closing costs, additional fees and costs. Though these are the main factors that will determine your choice, you need to read both loan contracts thoroughly as there may be additional terms written in fine print that may turn the loan more onerous too.

When it comes to the previous loan, you should also compare interest rates, repayment program and resulting loan installments, fees and costs. But you should pay special attention to prepayment penalty clauses. These clauses are meant to discourage you from refinancing your home loan by charging a fee if you want to prepay your current loan. If your home loan has this clause on it, you’ll need to ponder its amount too in order to decide whether you’ll save money by refinancing.

Interest Rate Comparatives

The main thing you need to compare is the interest rate charged for the money. This will determine whether your loan payments will drop (if the repayment program stays unaltered) and how much money you’ll save by refinancing. By requesting a cash out refinance loan you will get the finance you need but if the interest rate charged for your refinance loan is higher than your previous mortgage and your outstanding debt is still too high, you need to consider if it wouldn’t be cheaper to keep your current loan and request a home equity loan instead of refinancing.

Terms and Conditions

There are other loan terms and conditions you need to consider too. For starters, if the loan repayment program is longer and the interest rate stays unaltered you may save money towards inflation but in any case, you’ll at least benefit from lower and more affordable monthly payments.

Administrative fees are a common way lenders have to compensate for low interest rates. They offer promotional rates in order to attract clients and later, you find out that you have to pay thousands of dollars on administrative fees that if pondered altogether with the loan could raise the rate a point or two.

The same goes to closing costs which usually include legal fees, costs of paperwork, etc. Make sure to get a list of the items that the concept “closing costs” include before signing anything as you may find a surprise like abusive legal fees or hundreds of dollars of paperwork as if they were printing in papyrus.

Refinance And Benefit From Your Equity!

By: Kate Ross

Not everyone knows that by refinancing you can also take advantage of the equity you’ve built on your home and get extra cash for whatever purpose you may think of. Those kinds of loans provide many advantages that are often ignored by borrowers consequently loosing the opportunity to close on excellent deals.

With Cash Out Refinance Loans you can save thousands of dollars by refinancing your home loan for a lower interest rate than your outstanding loan and at the same time you can seize the benefits equity provides and obtain extra cash. In some cases the savings from refinancing exceed or equal the costs of cash out. Thus, it’s just like getting free financing because all your costs are compensated by your gains.

Property’s Equity

The equity you’ve built on your home will provide the source of your funds. The lender will lend you money against the equity on your home. It’s imperative that you understand the concept of equity because the implications are particularly important. You can take advantage of equity but it can also constitute a serious risk when used.

The equity on your home is the difference between your home value and the outstanding debt that is secured on your home. If you have a property worth $100,000 but you have an outstanding mortgage loan on it with $40,000 of debt, then the equity on your home is worth $60,000. Up to this amount, you’ll be able to request a home equity loan or line of credit. However, only those with good credit score can obtain 100% financing.

Cash Out Refinance Loans

Cash out refinance loans use the equity left on your home to provide additional financing. Thus, you are not only refinancing your home loan but you are getting extra cash in the same financial transaction. Continuing with the above example, you can seize the benefits of that $40,000 and refinance the $60,000 on your home loan at the same time.

Moreover, refinancing at a lower rate can provide you with huge savings over the whole life of the loan. These savings can easily compensate for the cost of cashing out your equity depending on the amount of money you request. The interests you are saving by refinancing can counterweigh the interests you’ll have to pay for the amount of money you request on your equity.

Purposes of Extra Cash

The extra cash can be used for any purpose you may think of; there are absolutely no restrictions as to the uses of the loan. However, under certain circumstances, you could get better terms if you use the money you obtain from cash out refinance loans to make home improvements.

If you plan on making home improvements on the same property being used as collateral, you should notify the lender as some lenders have promotional terms for home improvement loans. This is due to the fact that home improvements tend to increase the value of the property and thus raise the amount of equity on your home. By lending to you, the lender is contributing to increase the value that is securing the very same property protecting his investment. In many cases you can get up to a 1% interest rate reduction if you use the money for home improvements.

The Catch Behind No Closing Costs Refinance Loans

By: Richard Rives

You may have heard about No Cost Refinance or Free Refinance. The concept implies that the only thing charged on this kind of loans is interest. Those who promote this, claim that there are no closing costs, no additional fees, etc.

The financial industry has become increasingly competitive over the past years and lenders are desperate to attract customers, thus forcing their creative media guys to come up with new appealing concepts so as to take hold of as many clients as possible.

There is an old saying stating that “there is nothing really free”, and when it comes to this kind of loans, the saying turns out to be just perfect. So, you want to know what’s the catch with No Closing Costs Refinance? Read on and you’ll find out what lenders have prayed for you to ignore.

No Closing Costs Refinance

Those lenders who offer this kind of loans state that you’d be saving thousands of dollars on closing costs. Well those “thousands of dollars” add up to $3000, $4000 at a most. But if you pay attention to the interest rate they charge on No Closing Costs Refinance Loans you’ll notice that it’s almost 2% above the average interest rate offered by other lenders.

So their claim is only partly true. They are charging no closing costs at all, but what they make you save by not charging any fee, they compensate with overpriced interest rates. If you do your math, unless you’re requesting a 12 months refinance program, chances are that you’ll be paying a lot more than those $4000 in closing costs.

Avoid being tricked

Though ethically questionable, there is nothing illegal about these practices so you need to be particularly careful when looking for a refinance loan. What you may think is an excellent offering, can turn out to be a rip off. Always ask for loan quotes and take your time to analyze them, never rush in and don’t let loan salesmen trick you into signing something you don’t want to sign.

Whenever you hear “interest rate is a bit higher”, find out how higher and whenever you hear “you’ll save thousands of dollars on closing costs”, find out how many thousands. Do all the research you need to, till you find which lender is best for you.

Focus on the Interest Rate

Always remember when it comes to refinance, unless you are refinancing a small amount cause you’ve already paid almost all of your mortgage, you should focus on finding the lowest interest rate available. It is the only true way of saving thousands of dollars with a refinance home loan and anyone who tells you otherwise is lying.

So don’t pay attention to those offering incredible refinance programs at no cost and search the internet for refinance home loan lenders, request quotes and compare interest rates and fees. Once you’ve selected the best deal contact the lender in order to apply for the loan. Take your time to make a conscious decision and you’ll avoid costly mistakes.

Home Improvements Via Cash Out Refinance!

By: Kate Ross

It is possible to get all the finance you need to make home improvements by refinancing your home loan with a Cash-Out Refinance Mortgage Loan. If there is sufficient equity on your home you’ll be able to get all the money needed to pay for the materials and professional fees with a quick and hassle free approval process.

Financing through cash out refinance loan is a cheap source of funds that can provide you with additional benefits like a reduction on the interest rate you pay for your current mortgage or a reduction on the loan installments you pay every month and thus reducing your overall debt exposure. This can also increase your credit score because your income/debt ratio will improve too.

How Does it Work?

If you have a mortgage on your home and you’ve paid already some installments or if your property’s value has increased, you probably have some equity on your home. This equity is an excellent source of inexpensive funds. But instead of using a home equity loan you can request a cash-out refinance loan.

A cash-out refinance loan is basically like a regular refinance loan, only you request a larger amount than your outstanding mortgage loan. The main portion of the loan is used to repay your previous mortgage and with the extra cash you can do whatever you want. In this case, you can use the money to make home improvements. The extra money obtained is part of your new mortgage and thus it is under the same loan terms.

The above implies that you will be getting incredibly cheap financing for your home improvements by taking advantage of the equity on your home. But, that’s not the whole deal, by refinancing your mortgage you can get several other benefits that make these transactions worthwhile.

Benefits

By refinancing you can get lower interest rates, longer repayment programs and thus, smaller loan installments. This can really improve your credit stance even if your overall debt increases. This is due to the fact that even if you owe more money, your income will suffer less because your debt will be spread over a longer period and with lower interests. The result of these variables is a considerably lower debt exposure.

Moreover, home improvements will raise your property’s value, providing you with more equity on your home and a new source of credit. In the long run, you will be increasing your ability to get finance while saving money at the same time. If timing, loan term, interest rate and other variables are chosen correctly home improvement’s costs can almost be null due to being compensated by the gains they’ll provide.

Last, but not least, your credit score will eventually reflect these changes and soon enough will raise to show that your debt exposure has decreased, that the value of your assets has increased and that your income/spending ratio has improved on the income side thus providing you with the ability to cope with new and larger loan installments.

Get Competitive Terms on Home Loans And Refinancing!

By: Sarah Dinkins

Closing on a particular type of Home Loan can be a smart decision or not according to the terms of the new loan. Comparing loan terms is essential to proper financing. So, if you are planning to obtain your home loan, you need to be aware of what loan stipulations you need to watch closely in order to close on a better mortgage loan.

Before you strike that home mortgage deal, make sure it’s a conscious decision. A single right or wrong step could mean a difference of thousands of dollars in interests paid. There are some important steps to be kept in mind before you endorse that 2-to-3 decade note. It is one of the most important legal documents for most of us, as our mortgage payment is a key financial decision. Probably the most important one most of us will ever make. Hence, it makes sense to gather as much information as we can about options available about financing our homes.

Intelligent Negotiation

There are few things we must keep in mind while negotiating for a home mortgage deal. Many of us sign the first mortgage placed in front of us and due to the excitement of a new home, we tend to ignore few hidden points in the deal that could cost us thousands of dollars. We must look for a through professional real estate agent as he has relationships with the top lenders in the area, which can come handy while negotiating for lower interest rates. Secondly, by getting in touch with a professional agent, there are less chances of falling into a scam and he will ensure that all the financial steps are taken care of properly.

Getting The Right Lender

A good agent can make you feel the difference as said earlier. This is due to the fact that a lender and professional agent, at times, work as a team. Lenders are much more flexible in dealing with the real estate agents who have earlier done business with them. This establishes an effective combination between the two, which indirectly affects the home loan seeker. A good agent can make a substantial difference in setting up the cheapest financing. And the right financing can, literally, save you from paying thousands of dollars extra in interest over the years.

All the paperwork done while purchasing a home can be irritating at times and there is a possibility that we may miss something. Make sure that your lender helps you out with all the paperwork. Make a checklist and seek expertise from your lender and the agent before signing that home mortgage deal.

Also make sure to request 3 mortgage quotes before you choose a lender. These days the lenders offer at least 5-7 different programs and you must discuss all these programs with your agent to come to a final choice. Explore all possibilities and go for the best option. After all, it's your money you're spending.

You want to get the loan approved and move into your new home as quickly as possible, but don't overlook the fact that you are the one spending the money and they are the ones who should cater to your needs. Don't let the process become so intimidating that you lose that understanding.

Another thing to keep in mind is that you should always deal with your lender in writing. Receive a written report from your lender for every step taken towards mortgage deal. This will ensure that all steps have been followed without fail. Also don’t accept the terms that your lenders lay blindly. Make sure you examine every option available to you. If you negotiate a variable rate mortgage, many mortgage lenders have the ability to move you into a fixed loan if interest rates start going up. Make sure that you can understand well that option as it will be of aid if you are ever put into such a condition.

Don’t Get Rushed Into Refinancing Your Home Loan!

By: Kate Ross

You probably get refinance loan proposals all the time. Loan agents are promoting these loans everyday and advertising their products by phone, email, web sites, TV, street announcements, etc. However, you shouldn’t rush in as refinancing may or may not be the right financial product for you. Learn what you need to know before deciding.

There are many things you need to consider before making your mind about refinancing your mortgage loan or not. Basically you need to compare the terms of the outstanding mortgage with the new loan terms in order to see whether you will be benefiting from a refinance transaction or not and whether the advantages you might obtain are worth the trouble.

What to Analyze When Considering a Refinance Loan

The main terms you’ll need to watch closely when comparing your refinance home loan with your current mortgage loan are: Interest Rate, Length of the repayment program, Resulting Loan Installments, Cash-out amount (if applicable), prepayment clauses (penalty fees, prohibitions, etc.), Administrative Fees, Closing costs and other fees and costs.

Make a table with all this information and compare the overall costs by adding each line in each column. You’ll be able to obtain the numbers from the loan contract and the refinance loan proposal or loan quote. Make sure to read the contracts thoroughly so you don’t let anything out of consideration.

How To Compare Your Loans

The interest rate has to be lower in order to benefit from refinancing. However, if the interest rate is higher or the same, this can be compensated by longer repayment programs or by a larger loan amount that will let you get cash out of your refinance loan. If none of the above is true, then the refinance loan won’t be to your advantage.

The resulting loan installments need to be low enough so you can afford them and they must leave you enough space to undertake other expenses or deal with unexpected situations. So, you should only refinance for higher monthly payments if you are sure you’ll be able to afford them and if you can save money by doing so. This can be achieved due to a reduction on the interest rate or a cut on the repayment program.

Deciding on a Refinance Loan

Taking into consideration the above, plus any prepayment penalty fees, administrative fees, closings costs or other fees and costs, you can decide which refinance loan is right for you. You can search for online refinance loan lenders and request loan quotes and specific information on all of these factors. If after summing up all the variables you conclude that by refinancing you will save money or bring ease to your financial situation, then go ahead. Otherwise you may want to consider other financial products.

The key to success in this kind of decisions is not to rush in and do a thorough research before applying. Once you’ve collected enough information, compared different loan quotes between them and with your outstanding mortgage loan terms, you will be able to make a conscious decision.

Refinance your Home Loan and get Extra Cash

By: Kate Ross

Refinancing a home loan is a rather simple process. Yet it is smart to know what your options are before undertaking it. Many things have to be considered, you should compare lenders, rates, costs, interest types, etc in order to make a well informed decision.

Refinance Mortgage Explained

When you decide to refinance a mortgage you’ll be canceling a previous loan with the money amount obtained from a second loan. Unless of course your motive is that you are not being able to meet the monthly payments you should make sure that the new loan has overall better conditions than the previous one.

Refinance Advantages

The first thing to consider is the interest rate. You may be able to obtain a refinance with a lower interest rate because market conditions have improved or because your credit and financial situation have improved. Either way, pay special attention to other costs as you may be paying as much in extra fees as what you can save by reduced interests.

If your current mortgage interest rate is variable you may want to refinance your home loan and obtain a fixed interest rate, this will give your monthly payments certainty so you don’t have to worry about sudden increases on your expenses. Fixed rates tend to be a bit higher but the peace of mind that they imply is well worth the small difference.

You can also get a cash-out refinance, you’ll be refinancing for a higher amount than the amount owed so you’ll end up with extra cash for home improvements, buying a car, going on vacations or any other purpose you may think of. Just make sure that you are able to meet the monthly payments. Given that your new debt will be higher, your monthly payments will probably be higher too, unless of course you get a longer repayment program too.

Cash requirements

Bear in mind that there are certain expenses that must be paid separately, like attorney fees, closing fees, etc. However, if you don’t have the cash available, you can opt to charge this amounts to the loan principal, thus avoiding the need to find the money in order to close the deal.

How long does it take?

The refinance process is usually completed in a reasonable amount of time. A length ranging from ten days up to a month can be considered acceptable. If you are short on time, make sure to push for a quick closing when you talk about the loan conditions with the lenders as the time they can take is rather flexible. However, if you are not in a rush, you’ll better take your time to request quotes from many lenders and compare rates and other conditions in order to get the best deal available for you.

Finding the lender

The refinance can be obtained from the same lender that holds the previous mortgage or by other lenders. Don’t rush in; compare what the many lenders in the market have to offer. There are online sites offering access to a complete and up-to-date list of lenders dealing with mortgage refinance and this will make the process a lot easier.

Importance Of Interest Rate On Refinance Loans

Importance Of Interest Rate On Refinance Loans

By : Kate Ross

The interest rate is an issue that should never be bypassed when it comes to refinance home loans. Its importance is crucial as it will determine whether you benefit from refinancing or not.

Though other loan terms like loan length, loan amount, and other less important clauses should also be considered, the interest rate should be your main concern.

To simplify comparisons you should (on the many rates that may be thrown to you) concentrate on the APR. The Annual Percentage Rate will provide you with the best figure to know which loan is best for you. This figure takes into account not only the interest payable over the term of the loan but also any other related charges or fees. As such it’s the best measure for comparing the cost of borrowing from one lender to another.

Risk and Rate

Since refinance loans are secured loans, they carry rather low interest rates. However, your credit score will still modify the interest rate you’ll be charged for your loan. Thus, a good credit score applicant will get significantly lower interest rates than a bad one. Risk and rate are directly related and whenever you represent a higher risk, this is unavoidably translated into higher interest rates.

There are also other loan terms that modify the risk implied in the financial transaction and thus modify the interest rate you’ll have to pay for the refinance loan. Insurance, loan length, interest rate type, etc. are some examples of these terms. You can always discuss with the lender these subjects so as to get a competitive rate by modifying loan terms.

Different Loans, Different Rates

Different kinds of loans carry different rates. The interest rate charged for a 10 years home loan will be lower than the rate charged for a 20 years or 30 years home loan. Also, the interest rate charged for home loans with fixed rates tends to be higher than that of variable rate. However, variable rates can rise to new heights changing the original ratio.

Cash out refinance loans tend to carry higher rates than plain refinance loans. This is because the costs of cash out refinance loans include additional charges, more insurance, etc.

It all adds up to the fact that the loan terms will determine the interest rate and that little variation on the loan terms can result in raises or reductions on the interest rate.

Huge Savings

Thus, the key to refinancing is to agree with the lender the loan terms in order to obtain a lower interest rate. This can be boosted by requesting a refinance home loan with a shorter loan length. The main benefit of refinancing is that by obtaining a lower interest rate you can get huge savings over the whole life of the loan.

For example: If you have an outstanding mortgage of $50,000 with 10 years more of repayment at an 8% APR, You’ll end up paying $40,000 on interests by the end of the loan term. If you refinance at a 7% APR, you’ll end up paying $35,000 on interests which represents savings of $5,000.

How to Determine if it's Time to Refinance

How to Determine if it's Time to Refinance

(ARA) - Who wouldn't enjoy a break on their monthly mortgage payment? On the other hand, how can you be sure the timing is right to refinance?

Are the rates and the current mortgage market the best indicators? What about other factors having to do with your mortgage, such as mortgage insurance and rising payment amounts?

If your first mortgage has a fixed rate, you can easily compare it to current mortgage rates and know with relative certainty whether refinancing now makes sense. In the absence of any other pressures, as long as the rate you have on a fixed rate loan is lower than current rates, you should probably stick with it.

On the other hand, if you have an adjustable rate mortgage (ARM) and rates are rising, your payment will also be increasing. In this case, consider how much rates will climb and how much more you'll be paying per month. You may consult with a financial planner or loan officer to get their opinions on market trends. With their advice, you can decide if refinancing to a fixed rate now is more beneficial in the long run.

You're probably beginning to see that the right time to refinance has more to do with you than with the mortgage market. Sure, low interest rates are a factor, but your individual situation is the greatest indicator. For example, are you paying on a loan that requires you to carry mortgage insurance? Have you built up enough equity to drop that insurance through a refinance? If so , refinancing could save you hundreds each month, even if rates have remained unchanged or have increased slightly.

Did you sign a three- or five-year adjustable rate mortgage (ARM) in the last few years? If so, be sure you know when your introductory term expires. You'll want to get a head start on refinancing your loan unless you're prepared to begin making a much higher payment. This type of loan allows you to make reduced (usually interest-only) payments for the first several years. After that time expires, the loan reverts to a regular amortized loan with principal and interest payments. Unless your income has increased significantly, these payments could be an ugly shock.

Don't wait for this unpleasant surprise! If the introductory period on your three-year, five-year, or other loan is set to expire, beat increased payments to the punch before the first one hits your mailbox.

Sometimes, lowering your mortgage payment is not the primary focus. You may be thinking about paying down some of your high-interest debt, have a child going off to college soon, or be dreaming about a newly remodeled kitchen or bathroom. Getting cash out of your home may be the ticket. You can get cash out through a refinance that will allow you to draw against the equity in your home without taking out a second mortgage.

All of these and many others make up the list of reasons homeowners may choose to refinance their homes. Current interest rates are only part of the equation. Establish your goals, learn about your options, and make the decision that's best for you and your timetable.

Copyright © 2006, ARA Content

How To ReMortgage For A Better Deal

By: James Copper

Sticking with the same mortgage lender for the term of your mortgage no longer applies to the majority of borrowers. Traditionally you may have taken out a mortgage and stayed put for the entirety of the mortgage term however in recent times more and more borrowers have realised that this may not make financial sense.

Not being proactive in shopping around could mean paying over the odds for the biggest financial commitment of most peoples lives.

Many borrowers are put off the idea of switching mortgages by looking back to the time when they first bought their home, the seemingly endless saga of loan application and approval, legal work, packing and moving.

Securing a remortgage is in comparison a simple process, it wont generally involve the amount of paperwork, pressure and stress, no gazumping or gazundering either. In many cases it simply means transferring your loan to a new lender for a more favourable rate of interest.

The Pros

Remortgaging will in most cases mean reducing your monthly repayments. It can also be a good opportunity to review your finances as you may decide to pay off some of the capital or you could even raise some extra capital in this way, borrowing on competitive mortgage rates could be more favourable than seeking unsecured finance on generally higher rates of interest.

In many cases a remortgage is a way of securing a new fixed or discounted rate when the existing one comes to an end without having to go on the dreaded standard variable rate (SVR) It may also be that rising interest rates mean that your once competitive deal is no longer as attractive as it used to be, for example, if you have a tracker rate and the base rate is going up after a period of prolonged stability.

The Cons

The cost of arranging a remortgage is of course far lower than that of buying a property - there is no stamp duty to pay, no estate agents to settle and minimal legal fees involved, however remortgaging does come at a price. You may be subject to a valuation fee as this will usually be a condition of the new mortgage, although the lender may cover this charge on your behalf.

The main two fees to consider are the lender arrangement fees and the early exit charge/early repayment charge. Many lenders will charge a percentage of the mortgage balance if you redeem the loan within a certain period of time. These rates will differ hugely and some specialist lenders will even go as high as 6%.

In recent times arrangement fees have risen dramatically and now average between 499 and 1.5% of the loan amount. You may add these costs to the new mortgage although this means that you will be paying interest on them for the full term of the loan.

The large increase in arrangement fees is due on the most part for the lenders need to make a profit. The competition in the marketplace has seen more competitive rates and attractive offers which has meant that the lenders profit margins are not as they once were.

Remortgaging Step By Step

1. Towards the end of your tie in period, approach your existing lender to find out what they can offer you. It is worth bearing in mind that this could mean less paperwork and ultimately lower costs.

2. Calculate and consider the fees and costs applied to move away from your existing lender (if applicable). If these are too high then you wish to stay where you are until the tie in period finishes.

3. Make sure that you shop around! Compare what your lender is offering to what is available elsewhere. Compare the APR as this will take into account associated fees and costs.

4. Select your favoured mortgage product. Start the ball rolling by making an application.

5. If you are using your own solicitors, contact them regarding the remortgage, some mortgage lenders will provide the services of their own solicitors.

6. Once the valuation is complete and all other relevant paperwork, subject to approval your lender will send you a formal mortgage offer. Sign the papers and the transaction will be near complete.