Remortgaging

Remortgaging is basically where your existing mortgage with your lender is coming to the end. When that ends, you’ll move onto the standard variable rate so you want to have a look at different options.

Or, it could also be that you want to change your existing mortgage. Remortgaging is basically changing your current mortgage.

There’s lots of times when it might be appropriate to remortgage, so let’s look at some of them:

1. Your fixed rate is ending. Depending on your lender, around six months before the end of your fixed rate or your tracker rate deal, you can start looking to remortgage and secure a new rate.
2. Your circumstances have changed. It might be that you can get a much better deal than you had before. So for example, you might have taken a 10 year fixed product. Things have changed dramatically since then and now you have more choice of mortgage products.
3. You want to borrow for home improvements. Let’s say your house value has gone up significantly and you decide to release some money from your home. That’s called a further advance or additional borrowing. You might want to do that for home improvements. Or actually you want to go on a holiday of a lifetime – there are many reasons why you might want to release money from your home, and a remortgage is the right way to do that.
4. Debt consolidation. In certain circumstances you can look at consolidating personal debts onto your mortgage. It needs to be appropriate and the right thing but it could save you significant amounts on a monthly basis.
5. Interest rates are going up.  Remortgaging onto a new fixed rate might be the appropriate thing to give you peace of mind.
6. To change mortgage terms. You might want to overpay on your mortgage but there are restrictions with your current lender. Or perhaps you want to change your mortgage from interest only to repayment. There are lots of other little reasons why you might want to look at remortgaging.

The obvious one is that if you’ve got a great rate, remortgaging would not be a great idea unless you have to.

It is often a bad idea to remortgage if you have a substantial early repayment charge. That often applies when you’re tied into a deal such as a fixed rate or a tracker rate. If you want to come out of that early, the bank or building society charges you a penalty which can be a large sum.

If you’re looking to consolidate debts, there might be more appropriate options for you. Personal loans or refinancing in a different way might be better – or perhaps the debt you have doesn’t make a remortgage worthwhile.

Another one might be that your circumstances have changed. If your income has reduced or your family setup has changed it may not necessarily be a good time to look at remortgaging. If your house value has dropped, reducing your equity, again it may be better to wait.

When it comes to remortgaging it’s really important to talk through your options and understand the pros and the cons. That’s where having a conversation with a mortgage broker like ourselves is a good idea. We’ll give you honest and open advice about the benefits and any drawbacks.

You have the whole mortgage product suite available to you. By that I mean you have all the fixed rates, tracker rates, discounted rates products.

Again, it’s about going through those options and talking them through. Then you can understand whether it’s the right thing to do – and if not, why not.

It may be a very easy decision. It’s the right time to move, your fixed rate’s ending, so we will move you from one lender to another. Or you might decide to do a product transfer and stay with your existing lender. You literally switch from one product to another with that existing bank which can be faster and less complicated.

When you took out your fixed rate deal, it would have had an end date on it. At the end of that fixed rate term, you then move on to the lender’s standard variable rate. That rate is set by the bank and changes from one bank to another. It’s typically a lot higher than the fixed rate you’re on, so your payments are likely to go up.

When you get within six months of the end of your fixed rate deal, it’s time to have a look and start planning for your next fixed rate. Usually being on the standard variable rate (SVR) is not the best thing to do.

But sometimes going onto the SVR might be the right idea for you – because you’re looking to potentially pay large lump sums of your mortgage off, perhaps. Or you’re planning to move home soon and don’t want an early repayment charge.

So let’s start talking around three to six months out to see what your options are and give yourself the lowest payments possible.

Preparation’s key as always – I think I’ve said this a number of times over the different episodes! Being prepared and knowing your options from the outset is the best practice.

To help you get a good remortgage, keep your credit file looking good. That way there are no restrictions on the lenders you can approach. It’s about planning and making sure you know your options so you can get the most suitable remortgage deal for you at that time.

This is the great thing about remortgaging. There’s a myth out there that it’s really expensive to remortgage – but these days it’s not expensive at all.

Most banks and building societies now offer ‘free standard legals’ and ‘free basic valuation’. So they will cover the standard legal work for transferring your mortgage and they’ll also come out and do a basic mortgage valuation to make sure your property fits their security profile.

You can upgrade those bits if you want to and you can also decide to use your own conveyance or solicitor. But the great thing is there aren’t many costs involved now in remortgaging.

There will potentially be some additional costs like product fees and you will also potentially have a broker fee – but that will all be explained to you. Remortgaging is generally a cheap experience now which means that people have got lots of options.

A mortgage broker is here to help you get that preparation right. We’ll make sure you understand your options and give you the right advice so you can find the right mortgage for you.

Get advice, get the right mortgage and you can save thousands of pounds worth of interest. There are lots of additional things we can do with your remortgage as well, so pick up the phone, have a conversation with us, find out what your options are, get prepared and let’s get you the most suitable mortgage we possibly can.