Coming to the end of your current mortgage deal?

Lack of funding in wholesale markets has led to a dramatic reduction in the mortgages available

If you are coming to the end of your current mortgage deal, you will need to ensure that you find another mortgage quickly in a market that has seen unprecedented house price falls and a severe lack of schemes available. The government’s bail-out of the banking system in October should bring more confidence to many mortgage providers and encourage them start increasing their lending levels to the volumes seen during the latter part of 2007.

Initially, your first port of call should be to speak to your current lender and ask what they can offer you not to switch. Also, discuss your options with a mortgage broker who will be able to advise you about the options currently available across the whole of the market.

The lack of funding in wholesale markets has led to a dramatic reduction in the mortgages available. The best rates are usually reserved for borrowers with at least 25 per cent equity in their property. To qualify for the best deals try to overpay each month or use any extra cash to clear a lump sum from your debt. However, always check with your lender first because some may levy a charge or impose a limit on the amount that you can pay each month.

In the current financial climate, banks and building societies are increasingly nervous about lending to customers who have an imperfect credit history. Even a missed mobile phone payment can weigh heavily on the mind of your lender when considering you for a loan.

You can obtain a copy of your credit report from one of three credit reference agencies – Experian, Equifax or CallCredit. It’s important to update your details and correct any information that is wrong, also close down any unnecessary accounts to improve your overall credit score. Make sure that you are on the electoral roll and your address details are up to date.

The fees charged by lenders can add thousands of pounds to the cost of your loan and the best rates carry the heaviest fees, so it is important to look at the total cost of the deals that you are considering. Don’t forget to add any other costs, including legal fees, when calculating the cost of remortgaging.

Lenders are pulling offers and revising rates very quickly, so if you find a good deal, don’t delay otherwise you could miss out. It’s worth remembering that lenders will allow you to book into a new deal up to six months before your remortgage deadline. Booking in advance will ensure that you will avoid having to suffer a period on your lender’s standard variable rate, which is likely to be much higher than the rate on your current deal.

Your home may be repossessed if you do not keep up repayments on your mortgage.