Remortgage

Remortgage Advice

Paying too much for your mortgage? Need more flexibility?

There are many reason why you may want to remortgage your home. Here are a few-

  • Looking for the best deal when your existing mortgage rate comes to an end.
  • You wish to change the term to increase or reduce your monthly repayments.
  • Your home has increased in value so that you are eligible to a lower rate.
  • Need to release some of the value built up in your home for property improvements.
  • You are looking for a more flexible mortgage that fits with your lifestyle.

Remember, a mortgage is a long-term financial commitment. Making the wrong choice can affect your long-term financial security. Our expert team of mortgage advisers will help you make the right choice and ensure that the remortgaging process runs as smoothly as possible.

We would recommend that you start you search 4 months before you wish to remortgage. If it sounds like remortgaging could help you, then why not check out the current rates below then contact us today.

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It is always a good idea to understand what’s happening, so read on to find out more about what is involved in remortgaging and how help to ensure you’ll find a mortgage that is right for you.

1. Why should I remortgage?

Many borrowers choose to remortgage (switch their current mortgage for a new deal, either with their existing lender or a new lender) every few years in order to take advantage of new rates, mortgage offers or to fit a change in circumstances. The market is very competitive.

Remortgaging can help you…

  • Save money
    Remaining on the same deal for the full term of your loan could see you losing out on the opportunity to reduce the total amount paid back, in some cases leading to significant savings.
  • Suit changing circumstances
    If your financial situation has changed and you now need a mortgage that can accommodate, say, higher overpayments or a lower monthly rate, remortgaging can get you a deal that better fits your lifestyle.
  • Raise money  
    A rise in your property’s value or an increased income may means you could increase your mortgage to help pay for major outgoings such as a wedding or your child’s university costs, rather than borrowing separately, and in some cases more expensively, from other sources.
  • Consolidate your debts 
    Remortgaging can allow you to release some of the equity you hold in your home and consolidate other debts, such as a car loan or credit cards, which can attract higher rates of interest than that of your mortgage. While this could reduce monthly payments, it may mean you pay more over the long term, so carefully considered and professional financial advice should be taken.
  • Avoid moving home
    It can be cheaper and more convenient to adapt or add an extension to your home, paid for by remortgaging or a further advance, than to move home

Remortgaging may not be the right choice if…

  • You need a small loan
    Most lenders set a minimum remortgage loan level of around £25,000.The costs of arranging you remortgage may outweigh the saving you will make
  • You need to borrow a high percentage of your property’s value
    Usually, the more equity you have in your property, the better the mortgage rate you will be able to attract. If you own less than 5 to10% of your property after the planed remortgage, you may find it difficult to access the most competitive rates.
  • You may have high Early Repayment Charges
    If you have recently taken out a fixed rate mortgage or a discount mortgage you may find that early repayment charges make it expensive for you to take your loan elsewhere in its first few years. In some cases these charges can outweigh the savings you’ll get from switching to the new mortgage.
  • Your Employment circumstances have changed
    If you have changed from being employed to self-employed, but have not yet had time to build up a financial track record, you may find it difficult to get a good remortgage deal.

2. How much will it cost?

The main costs you might face when remortgaging are:

Early repayment charges

Early Repayment Charges (ERCs) are a penalty for leaving a mortgage before it comes to the end of your existing deal. Your existing lender will be able to advise you on any ERCs that apply.  Your mortgage adviser will take this cost into account when making designing a solution.

Average cost 1% to 5% of mortgage.

Lender’s arrangement fee

The costs of organising your mortgage. This could be a flat fee or a percentage. Your lender will be able to advise you of the fees that apply to your mortgage.

Average cost: £0 – £2,000+

Higher lender charge

If the mortgage you are taking out is a sizeable percentage of the property’s value, usually over 90%, the lenders may add a charge to insure themselves in case you default.

Average cost: 1.5% of the mortgage.

Valuation fees

The cost of hiring a surveyor to assess the property’s condition and value. Sometimes the lender will undertake a desk-top valuation using statistical information.

Average cost: £150 – £1,500 depending on the value of the property

Legal fees

The cost of instructing a solicitor or conveyancer for preparing the deeds, searches and carrying out the conveyancing process.

Average cost: £500 to £1,500 plus VAT

Booking fees

A one-off application fee for the mortgage, “booking” or reserving the capital while processing your request

Average cost: £99 – £250

The above is a guide only. Always obtain a written quote.

3. What is the process?

 

a) Choose a new mortgage

 

Make sure you consider all the costs involved to see if a remortgage deal is worth your while. Our expert mortgage advisers will help you pick a suitable mortgage for your needs.

b) Application

This is the same application process as buying a new property. The application has to be underwritten by the lender, who will require evidence of your financial situation to ensure that you can afford to repay the mortgage.

c) Valuation

A surveyor must be hired to assess your property for any changes in condition or area value, upon which an offer will be made. Next, a solicitor will conduct local searches and send a report and title to the lender.

d) Enjoy the benefits

Finally, the solicitor will ensure your previous lender is repaid when the new lender releases the new mortgage funds. If you’re borrowing additional funds, the solicitor will release these to you on, or shortly after, completion.

AS A MORTGAGE IS SECURED AGAINST YOUR HOME, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.
For mortgages we can be paid by commission, a fee or a combination of both. Our typical fee is £395. However, we will discuss your payment options with you and confirm the actual amount payable before we begin to provide our services.

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01536 483733

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