The Bank of England have cut interest rates to an all-time low of 0.1% following the outbreak of the Coronavirus in the UK. What does this all mean for our mortgages? Property Solicitor Charlotte Reason explains.
Banks are still releasing information as to how it impacts current and future mortgages. As solicitors, Attwells cannot offer financial advice. However, now is arguably a good time to obtain advice from a financial expert or mortgage broker to see if you can save money.
Is now a good time to remortgage?
Lenders are starting to announce cheaper rates and deals and these are expected to improve within the next few weeks especially as the market slows due to the impact of the Coronavirus. Therefore, considering a fixed term mortgage is arguably wise as you can maintain your low interest rate for longer. However, any savings will greatly depend on your own personal circumstances.
What is an Interest Rate?
The interest rate is made up from the Bank of England’s base rate and the interest the banks charge for lending their money. Therefore, essentially the interest rate is the rate banks lend money to consumers and other banks.
What is a base rate?
The base rate is regulated by the Bank of England to stimulate the economy by reducing or increasing growth by effecting the cost of borrowing.
What different types of mortgages are available?
Fixed Term Mortgage – If you have a fixed term mortgage your repayments will not change during the fixed period. However you may be charged an early repayment fee if you change lenders before your term is up.
Standard Variable Rate Mortgages – If you have a standard variable rate mortgage your payments will reduce or increase depending on the interest rate. Therefore, at present you should see a reduction in your payments however this is down to the lender’s discretion.
Tracker Mortgages – These are connected to the Bank of England’s base rate plus a set percentage. Therefore similar to standard variable rate mortgages your mortgage can reduce in cost or increase.
The 10 legal steps to remortgaging:
From start to finish the whole process takes an average of 4 weeks
- Identification checks
- Purchasing your current legal title documents from the Land Registry, checking them on behalf of your lender and yourself
- Removing old mortgages, paying monies owed and settling any fees
- Checking the lease, where applicable, to make sure it complies with the mortgage terms. Additionally, Attwells can solve issues with the leasehold title, or lease, if required
- Carrying out legal searches on the property to identify any issues and resolve them. Some lenders allow insurance policies to be taken out, instead of full searches which can be quicker and cheaper. These options will be explained during the process
- Reviewing the mortgage offer’s terms and conditions and highlighting any problems for you or the lender
- Helping you sign the mortgage documents correctly
- Completing final checks for bankruptcy searches which are required by your mortgage provider
- Finalising the re-mortgage for you. On the day of completion, funds will be received from the lender. Any fees and old mortgages will be deducted then the final balance will be sent to you
- Registering the new mortgage with the Land Registry. This will update your legal title to include the new mortgage charge.
I would like to remortgage, how can Attwells help?
Attwells Solicitors are property law experts and as such have many years’ experience in dealing with remortgages. We can help deal with the legal paperwork needed to change lender as quickly as possible so you can start saving money faster. Attwells will act for both you, as the borrower, and for your lender.
Attwells offer a fixed fee for re-mortgages. If you are re-mortgaging less than £500,000, we offer a fixed fee of £500. Some lenders offer cashback incentives which are usually around £500 allowing you to use your cashback to pay for legal fees.
If you would like a quote today please call 01473 229200 or email our new business team.
