New Year, New Finances: Mortgages

In the first of a series of posts to be published over the next few days, I intend to look at a few ideas for sorting out your finances in the early part of 2007.

Although your New Year’s resolutions may already be starting to fall by the wayside (if you’re anything like me), hopefully these simple tips will mean that you keep your finances in good shape, even if you can’t manage it for yourself.

First up, mortgages.

There’s not really that much to be said about keeping your mortgage rate in trim – however, if you’re coming to the end of a special rate, now is the time to start looking around for new deals. If you’re unsure when your deal ends, ask your lender. Don’t get caught paying your lender’s “standard variable rate” (SVR), which will more than likely mean that your mortgage payments go up.

An independent mortgage broker will be able to search the market for you, including deals which might not be available on the high street (and are likely to be better than at your bank or building society, who will more than likely only be able to offer you their own products). They’ll also be able to help with the type of mortgage you should go for (tracker, fixed etc.) The broker will take payment either as a fee agreed upfront, or by taking some commission which the lender pays out. Agree this beforehand so that you know where you stand.

To see the effects of an increase in the rate on your mortgage, take a look at our mortgage repayment calculator and play around with a few figures. This will show you how much you could save by switching to a lower rate, or even how much more you will end up paying if you get stuck on the lender’s SVR.

If you’re tied into a deal for a while but are lucky enough to have some spare money left over at the end of the month, why not see if you can make overpayments on your mortgage – our mortgage overpayment calculator will show how much that could save you over time, and how much it could reduce the term of your mortgage.

Next we’ll look at life assurance.

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