It’s no secret that the cost of living is constantly rising. With inflation hitting a 30-year-high over the past couple of months, people are starting to feel the impact on their bank accounts.
Borrowing and lending has, unsurprisingly, risen along with the cost of living. But with everything becoming more expensive, lenders are starting to look at their affordability models to reflect the economic climate.
As things become more costly, the way you get a mortgage is likely to change. Here’s what you need to know.
Can you save money when remortgaging your house?
In short, yes you can. If you are coming close to the end of your fixed rate mortgage then you should get in touch with our team at Roebuck Mortgages.
When you have six months left then we can help you lock in a lower long term fixed rate, saving you money whether you need to either remortgage or move. By locking in for a period of five to ten years you can look to save a lot of your hard-earned money over a longer period of time.
The impact of interest rates
The impact of interest rates is dependent on the type of mortgage you have. If you are on a variable rate tracker mortgage, this will be linked to the Bank of England base rate so you will notice an immediate change.
If you have a standard variable rate mortgage, you will see an increase in line with the rate of interest. You need to check your mortgage documents to understand how your lender will incorporate the rising interest rate into your mortgage repayments.
Finally, anyone with a fixed rate mortgage will feel the impact of interest rates at the end of their current mortgage. If you’ve got plans to re-mortgage a home, a higher interest rate could make your monthly payments more expensive.
What you can do
For the best chance of being accepted for a mortgage, it’s important to look at your financial situation and see if you can improve on areas. One of the first things that makes you more appealing to a lender is the amount of savings you have for a deposit. The more you put down, the less you will need to borrow.
If you don’t currently keep an eye on your credit score, now may be the time to. As well as giving you a clear picture of what potential lenders will see when checking your eligibility for a mortgage, you’ll also be able to make sure there’s nothing incorrect or out of date that’s damaging your rating.
By paying off credit cards early or on time and keeping up with your regular bills, you’ll strengthen your credit score and put yourself in a better position when it comes to getting a mortgage. It is a very easy way to make sure you will get the mortgage you need.
The next step
At Roebuck Mortgages, we have years of experience dealing with mortgages and work with our clients to help them get the most out of their product.
We can advise you on what you need to do in order to boost your chances of getting a mortgage and help you find one that is cost effective and suits your needs.
Get in touch with us about your mortgage.