This is what you need to know about remortgaging and why you should review your mortgage regularly.
When your existing fixed-rate or discount mortgage rate comes to an end you should review your options. This may be changing to a new deal with your existing lender or moving your existing mortgage to another lender to take advantage of a better deal. This is known as a remortgage.
We would always recommend that you take independent mortgage advice when reviewing your existing mortgage deal. The mortgage market is presently very competitive.
Doing nothing should not really be an option. If you stay with your existing lender without taking out a new deal you will be moved on to their Standard Variable Rate (SVR). This could result in higher monthly mortgage repayments.
If you stay with your current provider and take out another deal with them, this is called a product transfer. It is worth remembering that despite what your existing lender tells you, this rate is unlikely to be the best deal for you. The chances are that your home will have increased in value, you may be earning more money. All factors that will help you get a better deal elsewhere.
When recommending a remortgage our advisers will always take into account the costs, if any, of changing lenders.
Remortgaging affordability tests. What are they?
The Mortgage Market Review (MMR) which came into effect in 2014, introduced far stricter lender assessments to check whether you can afford the mortgage you are applying for. This also includes remortgaging.
The lender will look at your income and expenditure. Some lenders work on national or postcode averages, others will want more detailed personal figures. If you are looking to remortgage, it’s best to get your finances sorted out at least three to six months before. This gives you plenty of time to make changes to your cash flow which may help your application. The lender will also want proof of your identity and address details. This is usually a driving license or passport together with a recent utility bill showing your current address. Remember, mobile phone bills are not normally accepted. Credit reference agency checks will also be carried out.
Can everyone remortgage?
A change in your financial circumstances can also affect your chances of getting a competitive remortgage. This may be that you have gone from a two-income household to one or going from employed to self-employed.
If your home has increased in value from the last time you took a mortgage deal you may be able to get a better rate. If your loan to value (LTV) has got better you may be able to borrow at a more competitive rate. This may also allow you to release money from your property to complete home improvements such as an extension or a loft conversion.
What about Early Repayment Charges?
It is essential to check your mortgage documents for the Early Repayment Charge (ERC). Our mortgage advisers can help you with this. This will help you find out if it will cost you to move to another lender before your mortgage deal finishes. We normally recommend that you start looking six months before your existing deal finishes.
From a regulatory point of view, lenders must treat customers fairly. This means they will have to contact you at least a month before your deal matures, to let you know about any changes and options available.
The lowest rate does not always mean the best deal.
The best mortgage for you doesn’t necessarily come from the one with the lowest rate. You should always look at the total cost of the borrowing over the term of the deal.
You need to be aware of any other fees as part of the remortgage. Such as legal fees or survey fees.
Fees free deals offered by some lenders are attractive and popular. Unfortunately, the service offered by some of the legal firms they appoint can be poor. If you are looking to remortgage quickly and with less hassle, you may be better taking the “cashback” option. This allows you to appoint your own local conveyancer or solicitor and use the “cashback” to cover their fees.
You can start your research by checking out the top remortgage deals on our website. The rates are updated daily.
It’s also important to be aware that some banks and building societies won’t lend less than £25,000. They will also want the mortgage repaid by a set age.
How Anstee & Co can help you with remortgaging.
We are a firm of independent mortgage advisers. This means that the advice we offer is unbiased. We look at all the financial solutions available to you from the “whole of market”. All our mortgage advisers are fully qualified with many years of experience. They work with our “mortgage support” team based in Kettering.
Meetings can be arranged at a time and location convenient to you. This may be a home visit, an early evening meeting or at a weekend. Why not arrange a meeting today to see if we help you save some money by remortgaging. Our offices are located at-
- Kettering, Northamptonshire
- London, Pall Mall, Greater London
- Stamford, Lincolnshire
- Towcester, Northamptonshire
Finally, our mortgage advisers live and make use of meeting rooms in-
- Bedford, Bedfordshire
- Market Harborough, Leicestershire
- Northampton, Wellingborough and Brackley in Northamptonshire.
AS A MORTGAGE IS SECURED AGAINST YOUR HOME, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.