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ACCORDING to Bethan Davies of Love Mortgages, remortgaging to a better deal can be a great way to save you money.

She explains you may be on the standard variable rate with your current lender, and by remortgaging to a better deal you can save hundreds of pounds each month and even thousands over the long term, so it could be one of the biggest money saving activities you could do.

Bethan said: "Your circumstances do change, so what may have been right for you on your original mortgage may be different now.

"You may find a product with more flexibility to suit your circumstances, or something that is going to give you the peace of mind of fixed payments for a period of time."

She reports you may find that your existing mortgage provider can offer you a better rate, so you may not even have to switch to another lender, but it is still worth having a look to make sure you are getting the best deal available.

It isn’t just about the interest rate but the overall cost of the transfer. You may have exit penalties with your existing lender and a product or arrangement fee for the new lender. You may also have legal fees and survey fees to pay.

When applying for any mortgage you need to make sure what is and isn’t accepted by your new lender; they all have their own lending criteria, so you need to make sure you fit their requirements.
If you are considering remortgaging to consolidate debts there are other things to consider.

Bethan commented: "Although the interest rate on a mortgage might be lower than on your personal loans and credit cards, you may end up paying far more if your mortgage is over a longer term.

"In addition, the introduction of new rules this month means lenders have to place stricter checks to ensure you are able to repay the higher amount."

She says a mortgage is secured against your home; personal loans and credit cards are not. Although long term loans and lower interest rates may seem attractive, it may take you years before you have paid off the debt, so getting the right advice and making sure you understand the facts are very important.

She added: "Buildings insurance is compulsory when taking out a mortgage, as the lender needs to insure the asset that their loan is against. However, you do not have to take it out in conjunction with your new mortgage.

"You may also be approached to take out additional products such as contents insurance, life insurance and mortgage payment protection insurance. By comparing what is available independently you can make sure you are getting the right cover for the right price."

If you require more information regarding your mortgage or protection needs, speak to an independent financial adviser.

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