Last updated 05:12, Friday, 14 November 2008

Over the last 10 years or so, house prices have risen rapidly and mortgages have been relatively easy to get. All good things, as they say…

Don’t be deterred: When thinking about remortgaging, many people are deterred by the perceived hassle. Don’t let this put you off though. Re-mortgaging does not involve the same amount of preparation, paperwork and pressure that moving home does

Today, you don’t need to be reminded that house prices are falling and fewer mortgages are available, but that doesn’t mean that you can’t still find a remortgage deal that will save you money.

If your fixed-rate mortgage deal is coming to an end, you may think that the recent reductions in the Bank of England base rate will mean your mortgage will get cheaper when your current deal ends.

You may be right, but it’s wise to check. Despite a combined drop of two per cent since the start of October, mortgage rates vary from lender to lender and changes to standard variable rates (SVR) since the Bank of England rate reductions have been, well, variable.

If your deal is due to expire, or already has, check whether your existing mortgage deal requires you to pay an early repayment charge to redeem your mortgage early. This shouldn’t stop you thinking about switching, but you will need to weigh the costs of redeeming your current mortgage against the savings that could be made by remortgaging.

The credit crunch is responsible for a significant reduction in the number of mortgage deals available but there is still a choice, and that choice is likely to increase as the dust settles from the recent rate reduction. Don’t think the reduction in the number of mortgages means there are no deals to be had.

However, remortgaging won’t be an option for everyone.

Borrowers with a low amount of equity or a history of struggling to make payments may find it difficult to get a new mortgage. Many financial organisations will now only consider new mortgage applications from borrowers who have over 25 per cent equity in their property.

Most mortgage providers have reduced the loan to value (LTV) ratio they offer largely because they are not sure what’s going to happen to house prices.

While prices continue to fall, lenders do not want to offer mortgages on properties which may be worth less than the value of the mortgage in the future.

When thinking about remortgaging, many people start out with good intentions, but are deterred by the perceived hassle.

Don’t let this put you off though. Re-mortgaging does not involve the same amount of preparation, paperwork and pressure that moving home does, it simply involves changing your loan.

When you have chosen your new deal the hard part is over, and all that remains is to contact your solicitor who will organise for the repayment of your existing loan with your current lender at the same time as your new mortgage starts.

Some lenders will include ‘free legal work’ within their remortgage offer, and will organise the legal work for you through their nominated solicitor. For details of the Cumberland’s remortgage service, simply phone 0845 601 8396 or call into your local branch.

Phillip Ward is a marketing manager at the Cumberland Building Society. Visit the website at www.cumberland.co.uk. Your home may be repossessed if you do not keep up repayments on your mortgage.