Property blog: Homeowners suffering from ‘remortgage lethargy’
With remortgage levels down 19 per cent in March before the implementation of MMR, Lynne McCaffrey urges solicitors and brokers to join forces to highlight the benefits to homeowners and change incorrect perceptions.
“Homeowners have many misconceptions about remortgaging; some believe it is too expensive, that they’ll go through a lot of rigmarole to save just a few pennies each month. Others still bear the scars of a difficult property purchase and are worried remortgaging would open up old wounds.
“And now there’s the added influence of the Mortgage Market Review, newspaper headlines comparing securing a mortgage to climbing Mount Everest whilst wrestling a shark with one arm tied behind your back!
“So whilst spring has sprung the expected remortgage surge we have come to know and love at this time of year has yet to blossom.
“According to figures a 19 per cent decrease in remortgage activity for March places the market at its lowest level since 2005. But instead of sitting around moaning about it like its bad weather on a bank holiday, it’s time to be proactive and start dispelling these negative connotations and demonstrating how remortgaging can help households in all kinds of ways.
Lowering your outgoings
“Nearly two thirds of homeowners who remortgage take advantage of a new, lower mortgage rate. However with constant mutterings around a hike to the Bank of England base rate, homeowners are encouraged to do so sooner rather than later.
“There were rate increases on 14 of the 20 business days of April (70%) and decreases on just three days (15%). This means a homeowner remortgaging at the beginning of the month would have secured an average rate of 3.52% while those waiting until the end of April would have been remortgaging onto an average rate of 3.61%. Granted, it’s not a huge leap but I know which one I’d prefer.”
“With house prices on the rise again, many homeowners will start to see the equity in their property increase. As a result many are turning to their homes to help settle other debts such as loans and credit cards. A financial adviser can help homeowners better understand their options.”
“According to a recent study, converting a loft boosts a property’s value by a fifth whilst adding a second bathroom could see an uplift of 10 per cent. However such tasks don’t come cheap and many choose to use the existing value of their property to pay for these times of renovations -speculate to accumulate and all that.”
Remortgaging Made Easy
“If I had a pound for every time I heard someone say they’re not going to remortgage because it’s too difficult or it’ll cost too much… well I probably wouldn’t be writing this blog right now! Or maybe I would, just in a much more exotic location!
“I understand many homeowners have experienced a stressful time buying a property but don’t miss an opportunity by tarring remortgage with the same brush. Work with a professional mortgage adviser to find the right mortgage to switch to and an experienced law firm such as ourselves to make the whole process run as smooth as possible. What’s more our £399 remortgage fee includes VAT and standard disbursements so I refuse to hear those immortal words… it’s too expensive.”
Lynne McCaffrey is a licensed conveyancer with over 18 years experience. As Head of Property at Goldsmith Williams Lynne is responsible for the day to day running of the property department, which specialises in conveyancing, remortgage, buy to let and bridging.
Content correct at time of publication