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Remortgaging: Is it the option for me?
What is Remortgaging?
Remortgaging is when you find another mortgage for a property, whilst staying in that same property. You may want to replace your existing mortgage or your mortgage may be coming to an end.
Reasons as to why you may remortgage
- Your current deal is about to end.
- You want a better rate.
- Your home has increased equity.
- You’re worried about interest rates going up.
- You want to overpay & your lender won’t let you.
- You want to switch from interest-only to repayment mortgage.
- You want to borrow more or raise money.
- You want a more flexible mortgage.
- Home Improvements
- You want to move from interest-only to repayment.
When is it a good time to Remortgage?
It can be hard to know whether remortgaging is the right option for you and if it is the right time to do so. It would be a good idea to get in touch with a Mortgage Broker if you are not sure on what route to take.
When is it a bad time to Remortgage?
- Your mortgage debt is really small.
- Your early repayment charge is large.
- Your circumstances have changed.
- Your home’s value has dropped.
- You have very little equity.
- You’ve had credit problems since taking out your last mortgage.
- You’re already on a great rate.
There is no point taking out a remortgage if it is not going to benefit you or if it is going to make things more complicated for yourself. If you have bad credit or have missed repayments on your current mortgage, then it will be harder for you to remortgage – there are however options out there.
What happens if I don’t Remortgage before my deal expires?
You do not have to find another mortgage deal just because your current one is ending. If you do not remortgage before your current mortgage term ends, then you will be put onto your lenders Standard Variable Rate (SVR).
Lenders choose their own SVR and it is usually a much higher rate than if you were to remortgage. There are much better deals out there within the mortgage market meaning you could be saving money by remortgaging and being active about your deal coming to an end. It is advisable to start the search 14 weeks before the end date.
You can also remortgage before your deal ends but you will have to pay charges to exit your current deal early, these exit fees can be much smaller than the overall saving however. You should seek advice from the likes of a Mortgage Broker to ensure that you are getting the most out of your money and picking the right type of mortgage deal for you.
What Remortgaging options are available?
There are a range of options available when it comes to remortgaging, there are fixed-rate mortgages, variable mortgages, flexible mortgages and other loan options out there. Yet ultimately you will need to decide whether to remortgage with your existing lender or a new one.
Remortgaging with your current lender
When you decide to stay with your current mortgage lender and move to a new mortgage – it is called a product transfer. Remortgaging with your current lender can be advantageous due to the lender already knowing you and saving money on legal fees involved with a completely new mortgage deal.
Your lender may ask for an update of your financial situation but there will probably be no need for another credit check. Speak to your lender to find out what kinds of mortgages and deals that they can offer you.
Remortgaging with a new lender
Remortgaging with a new lender can sometimes be the option which saves you more money. You have more of a range of options if you were to switch to a new lender and there are so many different mortgage products out there now that it would be daft to not search around for the best deals.
Many lenders are competitive and offer all sorts of incentives to make you want to remortgage with them, features such as no repayment fees and cash incentives. You can also use the new remortgage to help leave your existing one if you wanted to.
How much will it cost to Remortgage?
There will be fees involved with remortgaging no matter what decision you make. These fees shouldn’t deter you from exploring the option of remortgaging however as in the long term you can save thousands of pounds through remortgaging. Some of the fees that you will have to consider are the following:
These are fees charged by lenders to arrange your mortgage, the amount will vary depending on your lender and the value of your mortgage deal. They can be charged as a percentage of the amount you are borrowing or as a fixed price. You can add these fees onto your mortgage or just pay them off as a one-off payment.
Some lenders will charge a booking fee, which is an added charge on the arrangement fee. Not all lenders will charge this, it is worth finding out if this fee is applicable to the mortgage deal you are applying for.
You will need a solicitor or conveyancer to sort out the legal documentation of your remortgage. Lenders sometimes offer mortgage deals which come with free legal work or cash incentives to help cover the cost.
How can a Mortgage Broker help?
A Choice Mortgage Broker can give you tailored one to one expert advice on the mortgage market. The mortgage market is ever-changing and can be slightly complicated so having an expert to guide you to the right option for you can be very useful. Mortgage Broker s can find the right deal for you depending on your needs.
Mortgage advisers can also help you to budget and make sure that you are going to be able to afford to pay off your mortgage monthly payments. Brokers sometimes have access to exclusive mortgage deals due to building relationships up with lenders too. Mortgage Broker s will be honest in telling you what is realistic and what is not for your current situation and help to find the right options for you no matter your situation.
Remortgaging can be daunting but it really doesn’t have to be. You can get in touch with a member of the team today, even just for a general enquiry. There is no point in making such a huge commitment without knowing the ins and outs of what you are getting yourself involved in.
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.