Mortgage Mistakes Cost Millions
Anyone who is looking to buy a home or arrange a mortgage should get as much help as they can. There is a lot of experts and specialists on hand to offer guidance. This is useful in finding out the best tips to follow, but you should also look to learn the most common mistakes people make with their mortgage.
When you know the most common mistakes, you can take steps to avoid these mistakes. This will hopefully help you make a more informed decision with your mortgage.
When it comes to well-known and trusted companies in the UK, MoneySuperMarket is leading name. When this company talks, people listen, and given they recently provided information about a common mortgage mistake which is leading to an additional £175m being paid each by mortgage holders, it is important people pay attention.
Do you want to lower your monthly mortgage payments?
The mistake relates to mortgages which switch over to the Standard Variable Rate mortgage, the SVR. If this has happened to you, there is a high chance you are paying too much for your mortgage each month.
The study by the well-known UK name indicates homeowners who have an SVR mortgage could save £133.46 each month by moving their mortgage to a better deal.
11.97% of mortgage holders in the UK hold an SVR when they apply to remortgage their property. When you take on board there is close to 11 million outstanding mortgages in the country, this equates to more than 1.3 million who have lapsed into the more expensive rate.
There is a problem that many mortgage holders don’t know they will be moved over to the SVR automatically when their agreed rate ends. This might leave you facing a nasty shock when it comes to your next mortgage payment.
Know what your mortgage costs each month
Emma Harvey is the Consumer Affairs spokesperson at MoneySuperMarket and she said; ”Standard Variable Rates on mortgages are notoriously expensive and with 15% of those remortgaging being unaware of how they work, automatically lapsing onto them is a common and costly financial pitfall.“
Emma continued by saying; “Regardless of whether you’re on an SVR mortgage or another type, there could still be significant savings to be made when your initial mortgage deal comes to an end. In fact, we found that the average saving for mortgage holders still within their initial product period is £28.36 per month, which really adds up.“
Emma also said; “In order to stay on top of how much you’re spending on your mortgage, be aware of when your current mortgage deal is due to come to an end and start researching rates several months in advance. You can arrange your new deal three months before the end date so that you switch over at the end of your initial term, ensuring you are always on the best deal.”
While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.