MAY Day could prove to be a bit of a shocker for mortgage holders.
Interest only mortgages in particular are almost impossible to find with banks looking for low loan to value and a gold plated guarantee that you will be able to pay the money back.
The Bank of England base rate may be as low as it can go but a raft of banks have announced that they are increasing their rates for mortgage borrowers and the rises will take effect from the first of next month.
The Manchester based Co-operative Bank is the latest to hit home owners announcing a 0.5% increase taking its SVR (the standard variable rate that most deals revert to after an introductory honeymoon period) from 4.24% to 4.74%.
It will add about another £40 a month to a £150,000 repayment mortgage.
The move, which will also hit Britannia customers since the recent merger, follows similar announcements from Halifax, Bank of Ireland and Clydesdale/Yorkshire Banks.
Around 200,000 RBS customers with an offset mortgage have already seen their rates rise from 3.75% to 4%.
According to the website MoneySupermarket many homeowners fail to keep tabs on their mortgage and while rates have been low have been happy to sit back and enjoy lower payments.
But it warns that banks are being far stricter and if your deal is about to come to an end you should start planning now to try and find the best deal.
Very often only a select few may qualify for the best rates advertised and if you took out a deal two years ago you could find conditions a lot tougher right now.
Interest only mortgages in particular are almost impossible to find with banks looking for low loan to value and a gold plated guarantee that you will be able to pay the money back.
The advice is to shop around at least six months before your deal expires. If you find a good rate and you qualify then you can usually sign up six months in advance. Beware though of redemption penalties if you switch provider, other penalties and arrangement fees.
Comparison sites can be helpful but beware of making multiple applications as it can affect your credit rating.
In fact if you are coming up to renew it is probably a good idea to check your rating anyway and try and clear any black marks. You can contest your rating if you think it is inaccurate.
There are three agencies used by lenders, Experian, Equifax and CallCredit and for a fixed fee of £2 they have to provide you with a Statutory Credit Report which is your basic credit file and what lenders see when they run a check. You can get more detailed information for a higher fee.
If you find a mistake you should first contact the creditor and if not resolved then ask the agency itself to investigate.
AGENCY CONTACTS
Experian: 0844 481 8000 or www.experian.co.uk
Equifax: 0870 010 0583 or www.equifax.co.uk
Callcredit: 0870 060 1414 or www.callcredit.co.uk
