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How much could you save by re-mortgaging?

 

Homeowners whose fixed rate mortgage deal has ended could save hundreds by just re-mortgaging!

When a fixed mortgage deal ends, you are usually automatically put onto the lender's Standard Variable Rate (SVR), which can cost borrowers more each month in repayments than if they actually re-mortgaged onto a new fixed rate deal.

Here are some examples to show you the savings when switched:-

How much could you save re-mortgaging with 40% equity in your home?

If a homeowner owned 40% equity in their home, they would look for a mortgage deal at 60% Loan to Value (LTV).

• The average SVR currently stands at 4.41%*
• The average two year fixed rate at 60% LTV is 1.67%*
• The average five year fixed rate at 60% LTV is 1.90%*

With a property valued at £250,000, mortgage borrowers looking to re-mortgage at a 60% LTV would be looking to borrow £150,000.

Using a mortgage repayment calculator, you can calculate that if this borrower was on the average SVR on a mortgage term of 20 years, they would be paying £941.70 per month.

 

If they re-mortgaged onto a two year fixed rate deal at the average rate of 1.67%, this borrower would pay £735.61 per month in repayment, a reduction of £206.09 per month.

 

If this borrower were to re-mortgage on a five year fixed deal at the average rate of 1.90%, they would pay £751.74 each month in repayment, a reduction of £189.96 per month.

How much you could save re-mortgaging with 25% equity in your home?

Those homeowners who own 25% equity in their home would look for a mortgage deal at 75% LTV.

• With a two year fixed rate average at 75% LTV, which is currently at 2.29%
• With a five year fixed rate average at 75% LTV, which is currently at 2.49%

If your property is valued at £250,000, a homeowner would look to re-mortgage at a 75% LTV, borrowing £187,500.

 

On the average SVR of 4.41% and a mortgage term of 20 years, repayments on the average SVR would be £1,177.13 per month.

 

Re-mortgaging onto a two year fixed deal at 75% LTV at the average rate detailed above, repayments would be £974.50 per month.

 

If the homeowner re-mortgaged onto a five year fixed deal at 75% LTV at the average rate detailed above, it would make their monthly repayments of £992.65, a reduction of £184.48 each month.

How much could you save?

There are many deals available offering rates below the average, which means for some borrowers, bigger savings could be made.

 

If you speak to a mortgage broker, they’ll be able to give you the best options for your circumstances.

Contact us today for more information or help finding the right mortgage deal for you.

 

 

 

*Moneyfacts.co.uk

 

How you can get negotiation-ready

 

According to a recent source, 30% of surveyed homeowners stated that they didn’t attempt to negotiate on the price when purchasing a home.

 

22% of these respondents indicated that this was due to a lack of knowledge, confidence and skills in house price negotiation tactics.

 

Therefore, it goes without saying that many risk over-paying on their house purchases.

 

This can be particularly prevalent in certain age groups, such as adults between the age of 25 and 34, who reportedly suffer the most unease when trying to bargain on the price of their home, whereas those aged 65 and over report feeling more familiar with the process.

 

So, what does it take to get a better deal?

 

Best tips for negotiating house prices

1) Do your research

Make sure you research house prices in the area you are considering. These will give you a better indication of what you should be paying and what is considered too steep.

 

Looking at online portals such as Rightmove or Zoopla will provide quick access to an array of properties in your desired area.

 

If you find that other house prices are lower, there may be room for negotiation, depending on the condition of the property in question.

 

2) Ask questions

Don’t be afraid to ask your estate agent questions about the property, such as:

- How long has the property been on the market?
- Why is the vendor selling?
- Has the vendor secured their next home?

 

3) Be sure you can definitely advance with the purchase

Have you got a buyer for your current property and can you afford the mortgage payments on the property you are interested in?

 

Being in a strong position financially will go a long way to making you a desirable buyer.

 

4) Determine the maximum price you are prepared to pay

 

It's a good idea to have a clear idea of your limits, so that you can control the conversation and keep calm when it comes to it.

 

5) Be realistic

It is possible to offer up to 10% lower than the asking price.

 

However, be careful not to insult sellers, particularly by pointing out flaws in the house or offering too low, as this could lose you the property if there are other interested parties.

 

6) Get the estate agent on your side

It is in the estate agent's interest to help their client receive genuine offers, so showing them that you are ready and serious about buying will be fed back to the current homeowner.

 

The buying and selling process often hinges on a certain level of trust, as both parties seek assurance about the other's commitment and readiness to move forwards.

 

No one wants to waste time on a sale that could fall through, so whilst it's key to be level headed, don't let that affect your actual interest.

 

7) Be open to re-negotiating

Although it is better to be sure before making a commitment, you can re-negotiate until the exchange of contracts.

   

8) Don’t get carried away

The negotiation is not the most crucial part of buying a home.

 

Most importantly, this is your life and your future home.

 

Do you need help buying or selling in 2021? Talk to our agents today for a comprehensive valuation or to browse the latest listings in your area.

 

 

Good news for first-time buyers as lenders allow smaller deposits

 

Over the last 12 months, first-time buyers have found it more difficult to move forwards with their purchase plans, as low-deposit mortgages became increasingly scarce.

 

Now that lenders have begun to re-introduce their 10% deposits, the current situation is looking up for new homeowners, as the number of available products at 90% loan-to-value ratio rose by 29% in the first two weeks of February.*

 

It is estimated that around £5 billion is currently being held up in the first-time buyer’s market due to the COVID-19 pandemic, as many future homeowners have decided to delay their move until they have greater financial stability and job security.

 

Are you looking to try again with your first property purchase?

Nine in ten 90% mortgages were withdrawn from the market in the wake of the COVID-19 outbreak last spring. 

 

Nearly a year on, first-time buyers have been handed a serious boost, with the majority of lenders now offering low-deposit mortgage deals and reducing the restrictions they put in place on how much of the deposit could be 'gifted' by friends or family members.

Are 95% mortgages likely to come back?

It is likely to be some time before we begin to see the full range of 95% mortgages re-appear back on to the market.

 

To learn more about your prospects as a first-time buyer, please visit our website.

 

 
*Moneyfacts

Landlords urged to comply with electrical safety regulation or risk fines

 

What are the new electrical safety standards?

The new electrical safety standards require landlords to ensure the safety of all electrical wiring and fixed electrical installations are tested and signed off for each of their properties.

 

If the test highlights any investigative or corrective work, the landlord has 28 days to rectify the issue.

What exactly needs to be tested?

The fixed electrical parts of the property.

• Wiring
• Socket outlets
• Light fittings
• Fuse box
• Showers
• Extractor fans

What does not need to be tested?

The new regulations state that the tenant is responsible for portable electrical appliances and therefore tests on these items are not required.

 

However, it is recommended that the landlord carries out tests on the portable appliance items they provide for good practice.*

When will the new standards be enforced?

For existing tenancies, an electrical safety test will need to be carried out by 1st April 2021.

For new tenancies, all electrical installations must be tested before the tenancy begins.

Who can carry out the electrical safety test?

Only a qualified electrician can carry out the test. Guidance for choosing a competent tester:

- Electrical Safety Roundtable
- Registered Competent Person Electrical single mark and register

What do you need to do as a landlord once the test has been completed?

- Provide a copy of the electrical safety report to each tenant in their existing properties within 28 days of the inspection.

- If requested, provide the local authority with a copy within seven days.

- Supply a copy of the safety report carried out to the electrician conducting the next safety report.

- Provide a copy of the most recent report to any new tenants.

- If requested, provide a copy of the most recent report to any new prospective tenants within 28 days.

- Electrical installations must then be tested every five years.

What happens if landlords do not carry out corrective work highlighted by the report?

The local authority has the right to enter the property (with the tenant's permission) to rectify the problem and will notify the landlord of this action.

 

The local authority can then bill landlords for the cost of any work completed by them.

 

If any issues highlighted within the report are not rectified within 28 days, landlords will potentially be faced with a fine of up to £30,000.

Landlords have the right to appeal to the First-tier Tribunal against any decision of the local authority.

 

Due to current restrictions with the pandemic, many within the sector are concerned about ensuring their compliance in time with qualified help.

 

If you'd like to talk about this in more detail, visit our website or learn more about our services for landlords.

 

*GOV.UK