Remortgaging is changing your current mortgage deal. There are many reasons that you might want to change your mortgage and you can choose to either change your lender or to change your mortgage and stay with the same lender, both are considered a remortgage.
Reasons you may want to remortgage:
Our fixed rate deal is due to end - Best to contact your Mortgage Advisor 6 months before it ends.
When you take out a fixed rate mortgage, the interest rate has an introductory fixed term, which is lower than the lender’s standard rate. When this term ends, you’re automatically swapped onto the lender’s SVR (standard variable rate). This could impact your finances significantly.
You think interest rates will rise
If you don't have a fixed rate mortgage, your monthly payments are likely to change with the UK base rate. Therefore, if you think they’re due to rise, you might benefit from remortgaging onto a fixed rate.
Your home rises considerably in value
If the value of your home increases dramatically, your LTV (loan to value) ratio will fall. A lower LTV gives you access to lower mortgage rates from most lenders.
You’re not allowed to make overpayments
Making overpayments on your mortgage can be beneficial if you can afford to do so.
To borrow more money
Remortgaging can sometimes be a good way to borrow additional funds for high value items or for Home Improvements. You can even use a remortgage to Consolidate your Debts, but you should bear in mind that it’s not always the cheapest way to borrow money. There are lots of factors to consider such as securing your debt against your property vs. the impact of having unsecured debt.
When is Remortgaging not a good idea? - If any of the below apply to you, remortgaging might not be a good option for you.
To change your mortgage type
You shouldn’t need to remortgage in order to change your existing mortgage from an interest-only to a repayment. Most lenders should offer this option to all customers.
Your mortgage has high exit fees
Some mortgages will have early exit fees or an early repayment charge. If these fees are high, they often outweigh the benefits of remortgaging.
You have a great deal
Whilst you should always look out for better offers, if you already have a competitive mortgage rate, you may not benefit from remortgaging.
You are close to paying off your mortgage
If you owe less than £50,000 on your property, the fees involved with remortgaging will likely outweigh any savings.
Your financial circumstances have declined
If your financial situation is worse now than it was when you took out your mortgage, your application for a remortgage is unlikely to be accepted.
Your property has low equity
If your property has decreased in value, your LTV will be higher. This means you will have very little or possibly negative equity (you owe more than your home is worth). Lenders will not accept a remortgage application under these circumstances.
How can Manor Holmes help?
Deciding whether now is the right time for you to benefit from a remortgage can be difficult. However, with my experienced knowledge I can direct you to lenders who are most likely to accept your application. I have access to deals that are not available directly to customers. If budget is a concern my aim will be to find deals suited your current circumstances and keep costs to a minimum.
How Long Does It Take?
You’d be surprised how quickly we can review your current mortgage and organise your remortgage for you. In some cases, such as product transfers you can be paying less in just a few days, more complex mortgages can take between four to six weeks.