This does not constitute advice. Professional advice should be taken prior to acting on any part of it.
Dental and Medical Financial Services Limited is an appointed representative of Best Practice IFA Group Limited, which is authorised and regulated by the Financial Conduct Authority.
If you are nearing the end of your initial mortgage term, you have a decision to make. You can either stay with your current lender, or you can start looking for a new mortgage deal. More often than not you can secure a better deal if you remortgage rather than allowing your current loan to roll over into the standard variable rate, because usually this rate is significantly higher. Securing a deal with a new provider can oftentimes net you a better result than trying to refinance through your current lender. All things considered, is now the right time to remortgage?
Why should you remortgage?
Industry experts agree that shopping around for the best deal after your introductory period ends has the potential to save you thousands of pounds over the life of your loan, and in some extreme cases, you could save that amount in one year alone!
In recent years, the mortgage market has had a record low base rate and, therefore, incredibly low interest rates. Many doctors and other medical professionals have enjoyed using the equity they’ve built up to make home improvements or just to have extra cash. During this time, remortgaging usually meant lowering your monthly payments, and many also chose to overpay and pay down their loan faster, where fees didn’t apply.
However, at the moment, remortgaging may not look as attractive and it might be a difficult decision to make. In an effort to curb inflation, the Bank of England has just raised the base rate to a 4% – a 14 year high. This has a knock-on effect on mortgage rates, but don’t despair. There are still some great deals to be found on the market, you just might need a little professional help to find one that works for you.
Possible challenges you’ll face when remortgaging
Whether you’re seeking a new mortgage or simply remortgaging your current one, you will have to undergo the same application process. As part of the process, you will need to pass a strict affordability test which entails being able to prove that in the event rates rise even higher than they currently are, you can still afford your monthly repayments.
You can potentially avoid the affordability stress test with some lenders if you opt for a long-term fixed-rate mortgage instead of a two or five-year deal. A long-term loan lets you lock in your rate for an extended period of time, so you don’t have to worry about interest rate performance for a while. This may not be the way to go if you’re concerned about monthly repayments as rates for long-term fixed mortgages tend to be higher than shorter terms.
The best way to find the right mortgage as a doctor
The best way to guarantee that you find the right mortgage for you is to work with a professional mortgage broker who specialises in working with medical professionals. Not only do they have the knowledge and experience you’ll need to find a great deal as a doctor or medic, but they have also developed relationships with lenders so they’ll know the right mortgage providers to work with.
Don’t let the options overwhelm you, work with a professional like the experts at Dental & Medical Financial Services so you can secure the best mortgage deal, no matter when you need to remortgage. For help at every step of the process, get in touch now.