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What Should I Do If My Mortgage Is Maturing This Year?

25 Jan 2025 | Almas Uddin
What Should I Do If My Mortgage Is Maturing This Year?

Is your mortgage coming to an end this year? We know the feeling all too well. Interestingly, loads of people reach out to mortgage brokers when they're at this crossroads. Our thorough look into the available options will steer you in the right direction.

Fancy starting the planning process? Let's crack on.

Key Takeaways

  • Check when your mortgage ends and understand it means you’ve paid off your loan. Look into fixed-rate or variable-rate mortgages for remortgaging.

  • Review your finances well. Know how much you earn, spend, save, and owe. Set short-term and long-term financial goals.

  • Talk to your current lender about renewal offers. You might get a better deal by staying with them.

  • Seeking advice from a mortgage broker can help find deals across the market that fit your needs best, highlighting how much customers saved on average.

  • Compare different mortgage options early to avoid higher interest rates later. This can save you money in the long run.

Understand Your Mortgage Maturity

Understand Your Mortgage Maturity

When your mortgage ends, it's a bit like the final bell at school – exciting but a tad confusing. You need to check when this will happen and mark it in big red on your calendar.

What does it mean for your mortgage to mature?

Your mortgage maturing means the big day has arrived: your loan is fully paid off. If you took out a 30-year deal on 1 January 2020, for example, it's all wrapped up by 1 January 2050.

Not every story is so straight though; changing the terms or pulling out equity can shift this date around. Lenders, those holding your mortgage documents and running the platforms we check our balances on, will give us a nudge as that date gets close.

Maturity isn't just about age; with mortgages, it's when we finally get to burn the loan papers.

It's like crossing the finish line in a long race where every payment was a step closer to owning our home outright. To find out when exactly we'll be throwing that mortgage payoff party, checking through our mortgage documents or logging into our lender's online service does the trick.

Key dates to keep in mind

We all know the drill: dates matter, especially with mortgages. So, here's the scoop on timing. Mortgage offers usually stay good for six months. This means we can grab a deal before our current one says goodbye.

It's like booking your next holiday while you're still on vacation - smart, right? Getting ahead of this game keeps us safe from interest rates deciding to climb up.

Locking in rates early gives us that peace of mind. Who likes surprises, anyway? Especially not the kind where costs go up! And the best part? If we change our minds or find something better, cancelling won't cost us a penny before it kicks in.

Keeping these dates in check is like holding the map during a treasure hunt – it guides us straight to the gold without losing any along the way.

Assess Your Financial Situation

Taking a good look at our money matters is key. We need to check how much we're earning and spending, then dream about what we want in the future.

Evaluate your current financial position

We need to sit down and have a good look at our money situation. It's like doing a big spring clean but for our finances. We check how much we get every month from jobs or other places.

Then, we list what we spend on things like food, bills, or that surprise car repair last month. Next up, savings – how much do we have tucked away for rainy days? And investments, those can be tricky but worth knowing about.

It's also smart to go over any debts or loans - mortgage aside. How much is left to pay off? What's the interest rate nibbling away at it? Finally, don't forget taxes; they always want their share.

The whole point is getting a clear picture of where our money goes and spotting where we might tighten the belt or find some extra cash hiding in the couch cushions. Trust me, having done this before, it makes figuring out the next steps with our mortgage way easier.

Determine your future financial goals

After checking where we stand financially, it's time to look ahead. Setting goals is like drawing a map for our money journey. We break down what we want into short-term, mid-term, and long-term targets.

For example, in the next year or so (that's short-term), we might focus on cutting debt and saving for emergencies. Looking further, say five years (mid-term), getting the right insurance coverage and lowering our debts even more could be our aim.

And then there are long-term ambitions that cover retirement savings and ensuring we're set for many years.

Every year, it's smart to do a financial health check-up to see if we need to tweak any plans based on how things are going. Just last year, one of us realised they were off track with their retirement savings goal during this annual review and adjusted their monthly contributions accordingly.

Keeping these goals in mind helps when considering mortgage deals or deciding between fixed-rate versus variable-rate mortgages for remortgaging options.

Explore Your Options for Remortgaging

Explore Your Options for Remortgaging

So, your mortgage is up for renewal and you’re thinking about remortgaging. It’s like stepping into a sweet shop, loads of choices but which one to pick? Fixed-rate deals could keep your payments steady while variable-rate offers might see them ebb and flow with the financial tides.

Going directly to your own bank for remortgaging options can be limiting, as they can only offer their own products. Independent brokers, on the other hand, can provide access to a broader selection of deals that may be more favorable for consumers.

Do you stick to what you know or venture into new waters with a different term length? The decision isn’t easy, but it sure is crucial.

Fixed-rate vs variable-rate mortgages

Picking between fixed-rate and variable-rate mortgages can feel like choosing your next adventure. Both have their perks and quirks. Let's break it down in a way that's as easy as pie.

Fixed-rate mortgages are like a steady ship. Your payments stay the same for the whole term. This makes budgeting a breeze. You're protected if interest rates go up. From 2013 to 2020, folks often found two-year fixed deals cheaper than the five-year ones. This saved them a good chunk of change.

Variable-rate mortgages, on the other hand, are more like riding the waves. Your payment can change because the interest rate changes too. Sometimes this means you pay less at the start. This option can give you more freedom. You might not have to pay extra to pay it all off early.

Here's a bit more detail in a table:

Type

What's It Like?

Pros

Cons

Fixed-rate Mortgages

Stable and predictable

Easy budgeting, no worries if rates go up

Could be pricier if interest rates fall

Variable-rate Mortgages

Flexible, with potential for lower initial rates

Possible lower start rates, no early repayment charge

Risk of payment increase if rates go up

In a nutshell, if you like knowing exactly what you're paying each month, go for fixed-rate. If you're okay with a bit of risk for possibly lower rates, variable might be your cup of tea. Whatever floats your boat, just make sure it matches your financial goals and current situation.

Consider shorter or longer-term mortgage deals

Deciding between fixed-rate and variable-rate mortgages has us pondering. Next, we discuss the preference of either shorter or longer-term arrangements. This choice can considerably alter the sum we disburse every month and for the duration of our mortgage.

  • Almost two-thirds of Santander clients opted for two-year fixed rates, indicating a sturdy inclination for short-term ease.

  • More than a quarter preferred five-year fixations, combining stability with a bit more space before their subsequent substantial mortgage judgement.

  • Adoption of shorter terms often signifies elevated monthly instalments. However, it minimises the cumulative interest we pay over the years. It's comparable to deciding to sprint for a brief period rather than ambling for hours.

  • Extended terms mitigate the stress on our monthly budget by reducing our amount due at each instalment. But, there's a snag - we compensate more in interest throughout the life of our mortgage contract. Visualise it as gradually filling a bucket with water using a petite cup; it gets filled eventually but requires a lengthy time and increased water.

  • Pondering over future financial objectives is pivotal. If we anticipate relocation or predict variations in income, adaptability could be invaluable.

  • Areas where brokers are favoured witnessed a greater fraction of individuals inclining towards short fixed-term mortgages. It implies something fascinating – counsel from authorities might steer our decisions saving money in the long term.

When scrutinising remortgaging options, we assessed this decision ourselves. Shorter terms initially seemed intimidating with their elevated disbursements, but calculating the numbers revealed significant savings on interest – somewhat like glimpsing brightness through dense clouds.

Deciding between shorter or longer arrangements isn't only about the current budget but also our future ambitions and aspirations. That's why it's vital to consider both aspects comprehensively before proceeding.

What is a Mortgage Broker?

Definition and Role

Imagine you’re on a treasure hunt, but instead of gold, you’re searching for the perfect mortgage deal. A mortgage broker is like your trusty guide, leading you through the maze of options to find the most suitable mortgage for your needs. They act as intermediaries between you and mortgage lenders, using their expertise to connect you with the best mortgage deals available.

Mortgage brokers have a deep understanding of the market and access to a wide range of mortgage deals from various lenders. This means they can offer tailored mortgage advice based on your unique financial situation. Whether you’re a first-time buyer or looking to remortgage, a mortgage broker can help you navigate the complexities of the mortgage application process, ensuring you secure the most suitable mortgage for your circumstances.

How Mortgage Brokers are Paid

No Extra Cost to Clients

One of the best-kept secrets about mortgage brokers is that their services often come at no extra cost to you. That’s right – many mortgage brokers, including those offering free online mortgage broker services, don’t charge you a penny. Instead, they receive a commission from the lender once your mortgage deal is finalized.

This payment structure means you get unbiased mortgage advice without worrying about additional fees. The broker’s goal is to find you the best mortgage deal, as their commission is tied to the successful completion of your mortgage. So, you can rest easy knowing that your mortgage broker is working hard to secure the right mortgage deal for you, without any hidden costs.

Mortgage Broker Regulation and Security

Protection and Peace of Mind

When it comes to choosing a mortgage broker, ensuring they are regulated and secure is crucial for your peace of mind. A reputable mortgage broker should be registered with the Financial Conduct Authority (FCA) and listed on the Financial Services Register. This registration guarantees that the broker adheres to strict industry standards and regulations, providing you with a trustworthy service.

Additionally, a secure mortgage broker will have a properly protected website, using encryption to safeguard your personal and financial information. This means you can confidently share your details, knowing they are well-protected. By choosing a regulated and secure mortgage broker, you can trust the mortgage advice and services you receive, ensuring a smooth and safe journey to finding the right mortgage deal.

Contact Your Current Lender

Ring up your bank or building society. Have a good chat about staying on board with them, maybe even snagging a sweeter deal. Mortgage brokers charge fees that can vary significantly, ranging from £250 to £3,272, but some brokers are compensated by lenders, resulting in no fee for the borrower.

Discuss renewal offers and flexibility with mortgage lenders

We always chat with our current loan giver before our mortgage ends. They sometimes have special deals for staying with them. This is a smart move because it can save us from jumping into higher rates elsewhere.

We found that starting these talks six months before our deal runs out gives us plenty of time to think and decide.

Locking in a rate early means sleeping well at night, knowing we're safe from rate hikes.

Also, we learned flexibility is key. If rates dip before our new deal starts, we can switch without losing money. This happened to us once, and swapping was easy and didn't cost extra.

Talking openly with lenders about changing terms has helped us adjust when life throws curveballs.

Negotiate better terms if possible

After chatting with our current lender, it's time to play a bit of hardball. Yes, we can negotiate! With mortgage brokers on our side, they bring the big guns - expertise and connections.

They know the ins and outs of mortgage deals like nobody’s business. Their job? To get us a deal that makes our wallets happy. And let's not forget, if interest rates have taken a dive since we last checked, this is our golden ticket to snagging a better rate.

Brokers are kind of like matchmakers but for mortgages. They sift through heaps of offers, finding ones that fit just right. And with their help, we aren’t just another number in the system; lenders pay attention when these pros walk in the room (or send an email).

It’s all about making sure we don’t miss out on saving some serious cash over time. So yes, negotiating isn't just possible; it’s essential.

Seek Expert Advice

Alright, let’s talk about getting some expert advice. Chatting with a mortgage broker or financial guide can be a game-changer. They have the know-how to sift through deals across the market like they’re sorting socks, finding ones that fit your situation just right. It's important to seek recommendations from trusted sources, and remember, you don’t have to use a broker that an estate agent recommends.

Plus, these pros use tools like mortgage calculators and have access to a secret menu of exclusive offers you won’t find on your own. So, if you’re scratching your head over interest rates and terms, these are the folks to turn to for clarity without the jargon.

Consult a mortgage broker or financial advisor

We know figuring out what to do as your mortgage matures can feel like trying to solve a puzzle while blindfolded. Seeking advice from a mortgage broker or financial adviser may indeed be the guidance you require. Here's why:

  • Mortgage brokers are experts who understand the market thoroughly. They strictly adhere to rules put forth by the Financial Conduct Authority (FCA). This implies their credibility.

  • These advisers have successfully obtained their Certificate in Mortgage Advice and Practice (CeMAP) qualification. Additionally, they've accumulated at least two years of providing wise counsel. You're in competent hands.

  • They can introduce you to deals that might be challenging to find independently. It's akin to having exclusive access to the most favourable mortgage rates gathering.

  • A broker will discuss your needs, examine your affordability, and assist in aligning you with a deal that suits perfectly.

  • They save your time and prevent stress by managing all the mundane paperwork and phone conversations.

  • Before allowing them to assist you, ensure they're registered with the FCA. It's a straightforward process – simply visit the Financial Services Register online.

  • They also present exclusive deals. Some lenders reserve their prime offers specifically for brokers.

Our direct encounter? Consulting an adviser relieved us of unnecessary stress. We were saved from wading through technical documents or the endless back and forth with banks. Our broker took on the hefty tasks, found us an excellent deal, and even helped us make sense of the intricate details.

So yes, we ardently advocate for a conversation with an independent mortgage broker or financial adviser as your mortgage renewal approaches. It might be the deciding factor between settling for an average deal and obtaining one that fills you with joy!

Compare deals across the market

After conferring with a mortgage adviser, we orient our efforts towards the subsequent significant step: examining deals across the market. This smart strategy can yield significant savings in the long run. Within the UK market, the breadth of mortgage products available is vast, making it crucial to find the right mortgage tailored to individual needs.

• Our journey begins with investigating diverse mortgage lenders. Each one presents a unique package of deals, akin to a treasure hunt where hidden gems can surface unexpectedly.

• Employing online mortgage calculators enables us to comprehend our affordability capacity, akin to a financial forecast tool.

• Engaging with an independent mortgage broker proves greatly beneficial. They can tap into exclusive mortgage deals that may not always be directly accessible to us. Picture an insider friend who knows all the insider details.

• We also dedicate time to stay updated on the latest from the Financial Conduct Authority (FCA). As they monitor lenders, it is beneficial to stay informed about the guidelines being adhered to.

• A comparison of fixed-rate versus variable-rate mortgages is vital. Do we prefer the certainty of fixed monthly payments or are we open to the risk of potentially lower rates?

• Evaluating our credit history is also part of our preparation. Higher scores can facilitate access to favourable rates. It’s akin to maintaining financial hygiene for potential inspection.

Based on our journey thus far, beginning this process early provided us with a significant advantage. We didn’t accidentally stumble upon attractive deals; we had the luxury of time to make reasoned decisions without pressure. Moreover, timely action enabled us to avoid potential hikes in interest rates that could have escalated our costs in the future.

To put it succinctly, investing efforts now can result in minimised stress and maximised savings in the future. Isn’t that a goal we all aspire to?

Conclusion

Well, we've journeyed through the labyrinth together. If your mortgage is concluding this year, it's the decisive moment. Initiate by deciphering what your mortgage termination truly signifies.

Understood? Excellent. Subsequently, conduct an in-depth assessment of your financial status and your desired future position. Choices for a fresh mortgage arrangement? They're available – fixed or variable rates, brief or extended durations.

Time to engage in conversation with your present home loan provider. Flexibility and superior terms might just be available if you inquire politely. But don't halt there; obtaining guidance from a knowledgeable mortgage broker could reveal potential deals that were unknown to you.

So, here's our small contribution: Get ready and explore those options with everything you have. Focus on the ultimate goal – securing that perfect agreement that fits seamlessly!

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