Mortgage Refinance

Is a Mortgage Refinance a viable option for you?

If you are considering a mortgage refinance then here are a few questions you should ask before incurring any costs in a mortgage refinance exercise.

Will my existing lender reduce my rate if I put in a request?

Lenders will always do their best to keep a good client. Naturally they need to make a profit on their business but if they can pass on even a small rate reduction they will generally do so, rather than lose you as a customer through a mortgage refinance.

What are the costs involved in a mortgage refinance?

You will incur costs with both the existing lenders as well as the new lender.

Existing Lender's costs on a mortgage refinance may include:

Discharge fees
Legal and Registrations fees
Early exit fees which generally apply if you repay a loan within up to 5 years of its commencement. Exit fees will vary depending on whether you are in a fixed or variable rate loan. Check to see when your exit fee will drop off as it may be that by delaying your mortgage refinance you will reduce your mortgage refinance costs.

New lender's costs on a mortgage refinance may include:

Application and valuation fee
Legal, registration and stamp duty costs of the lender and your own solicitor.
Lenders Mortgage Insurance is payable if your new loan exceeds 80% of the value of your property.

Knowing the costs will help you determine whether a mortgage refinance is a viable option for you.

What is the interest rate saving if you go through with a mortgage refinance:

To ensure you mortgage refinance is a viable proposition you must achieve a good interest rate saving - one that ensures you are "ahead" within 6 months of the mortgage refinance. Too often borrowers go down the path of a mortgage refinance only to find that the interest rate differential between the existing and new lender's loan diminishes before the costs of the mortgage refinance are recouped.

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