End Of The Line…All Change Please!
Taking out a fixed rate deal on a mortgage two or three years ago may have seemed like a really good idea at the time and anyone who did so has probably saved quite a bit of money throughout the duration of the fixed rate period. Interest rates were low at the time and so there was a large selection of cheap loans to choose from. But now the problems with short term loan and mortgage deals are starting to become evident as the cheap fixed rate period is coming to an end for many borrowers.
There are 30 billion pounds worth of cheap fixed rate mortgage deals coming to an end through the month of July alone and according to a survey by Moneysupermarket.com more than half of these borrowers have not yet started to look for a new deal on their home loan, although most of them are likely to be facing huge increases in the level of their monthly repayments, due to increases in interest rates offered on loans by banks and building societies.
A large number of individuals will find themselves paying the lenders standard variable rate on their mortgage and with rates as they are, many will simply not be able to afford to keep up with the new monthly payment and face the prospect of severe financial difficulty unless they do something about the problem right now!
With banks and building societies tightening their lending criteria on mortgages and becoming far more selective about who they are prepared to take on as customers, it is much harder to find a new re-mortgage deal than it was two years ago and borrowers should not leave it to the last minute before they think about changing lender. Realistically, they should start to plan changing mortgage deals three months prior to the current deal expiring and it is also worth talking to an independent mortgage broker who is able to search the whole of the mortgage market place to find the best deal for a new loan.
It is apparent from the figures quoted above that many people simply don’t want to think about such matters and bury their heads in the sand. This course of action will only end in tears. Do something about your mortgage now, before it’s too late!
