If you are looking to buy a home and arrange a mortgage, it is vital you undertake research. You should follow tips and guidance from the experts, but you should also familiarise yourself with problems and mistakes.
Many people in the UK are familiar with MoneySuperMarket, and they follow the teachings and instructions placed on site. Therefore, news of a problem that is leading to mortgage holders paying an additional £175m per month should be noted, and avoided.
There is a lot to focus on right now, but if your mortgage has moved into the Standard Variable Rate (SVR) mortgage, there is a good chance you are paying more than you could on your mortgage payment each month.
Mortgage mistakes can be very costly
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.
The problem is that many mortgage holders are unaware they will be automatically moved onto the SVR when their fixed rate mortgage concludes. This might lead to a nasty surprise when the new mortgage payment comes off your bill.
People who are remortgaging for the first time are more likely to succumb to this problem than someone who has remortgaged successfully before. This makes sense. Once you make a mistake which costs you a significant amount of money, you will be far less likely to make the same mistake again.
Be aware of what your mortgage costs, and what it could cost you in the long run
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.”
Anyone looking to arrange informed and up to date guidance regarding a mortgage should speak with an experienced professional.