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Remortgaging is when you switch from your current mortgage to a new deal.
Your new deal can either be through your existing lender or a new provider. If you own more than one property, you can remortgage any property you own.
There are several reasons why remortgaging can be a good idea, from cutting costs to raising extra capital.
You may choose to remortgage to get a better rate and cut monthly payments. You can do this either via your existing lender or by engaging a new lender. If you choose a new lender, they will pay the capital owed to your old lender, and you then pay the new mortgage in line with the agreed terms.
As a guide, you will need a minimum of 10% equity in your home or 10% deposit ready to put down.
Another way to reduce monthly repayments is to remortgage with a longer term arrangement, for example, moving from 20 to a 25-year term. It is important to note that while this option reduces your monthly repayments, the overall cost is likely to increase.
Contact our team today to see if we can see can save you money on your remortgage.
Remortgaging is one way to release equity from your property.
There are various reasons you may decide to remortgage for additional borrowing, from starting a self-build to paying for home improvements or debt consolidation. Depending on the purpose, lenders will stipulate the acceptable Loan to Value (LTV) ratio.
There are actually positive benefits to remortgaging in terms of improving your credit record.
Not only are you able to consolidate your debts and keep a handle on repayments, but you will also be able to demonstrate your ability to manage debt. The rates you will get on your remortgage are also more likely to save you money in comparison to credit card or loan debt.
In comparison to getting your first mortgage as a first-time buyer remortgaging is typically very easy.
With no house to buy or sell, no chain, no contracts to exchange, even if you move lender, the process is straightforward. You find the mortgage deal, complete your application, and your solicitor and lender deal with the rest.
You may require a valuation, notably if you have improved your property since purchase. However, many lenders use online valuation services, so a physical assessment is not necessary.
If you have bad memories of your first mortgage as a first-time buyer, you need not worry.
Remortgaging is generally much quicker and easier to organise. The entire process can conclude in as little as four weeks. With a straightforward application, a good credit record and a typical property, remortgaging is prompt.
Try to have your documentation organised and ready ahead of starting your application. A competent broker will help to speed up the process if needed.
As long as you have equity in your home, you will not need a deposit. To reduce your monthly repayments, you may have the option of adding to your equity by way of adding a deposit.
Yes, as interest rates are at their lowest level in history (0.1%) and lenders are offering attractive mortgage deals.
Also, the financial stability provided by a fixed rate may be beneficial in the current situation. Complete our quick and easy online form to find our latest deals.
Depending on your mortgage deal and current provider, you may have charges to consider when remortgaging:
A few costs that are likely to apply if you remortgage include:
This will depend on the lender and the mortgage package. Arrangement fees can be charged as a percentage or a fixed sum and can be paid up-front or added to your mortgage borrowing.
Some lenders charge a booking fee on top of the arrangement fee. These are generally a one-off payment of £100-£200.
Some lenders will include legal fees as part of their remortgage package.
A solicitor (or conveyancer) will be required to finalise the mortgage. However, there is a lot less work for a remortgage, meaning less cost.
You may not require a valuation, although if you are moving to a new lender, they may need to see your property to confirm the value is correct. Check if your new deal includes a free valuation. If you need to cover the cost of the valuation, this will depend on the size of your property and can range from £250 to £1,500.
Our experienced mortgage advisors can guide you through the process or remortgaging.
You are likely to incur an early repayment charge if you remortgage on a fixed rate mortgage where you have committed for several years.
This is generally calculated as a percentage of your total borrowing; between 2-5%. This is on top of the smaller exit fee which your current lender will also apply.
We would recommend calculating the benefits to remortgaging in comparison to the fee levies; our advisors can help.
No, there are thousands of deals available for remortgaging. There are pros and cons to remortgaging with your current lender.
With interest rates at a record low, remortgaging with a different lender offers more possibility to find a better deal.
Throughout the term of the mortgage, lower interest rates will mean thousands of pounds saved or lost. With healthy equity in your home and solid credit history, you can expect to achieve the best rates.
There are steps you can take to secure a deal if you have been declined for a remortgage.
Firstly, ensure you understand the primary concern, whether it be credit history or affordability. This is information you will be able to pass on to our advisors. Next, contact our advisors and discuss the situation; they will be able to search the market for the best deal for you.
The typical ceiling is 90% of the value of your home, leaving 10% in equity.
Affordability is another factor to consider; 4.5 times your income is generally the limit for lenders in the majority of circumstances.
Yes, however depending on the reason for raising the cash, the process may differ.
One of our experienced advisors will be able to provide guidance on the available options. Equity release mortgages are another option for over 55s who own their house outright. Read our guide to equity release mortgages for more information.
With no equity in your home, you will need to inject capital to reduce your loan to value and secure a reasonable rate on your remortgage. It may be that any fees associated with remortgaging outweigh the benefits, so this is something to consider. Our advisors can help.
A joint remortgage is where all people named on the mortgage are assessed for eligibility and affordability, with all named persons being responsible for mortgage repayments.
In certain situations, it may be beneficial to consider a second charge mortgage or an unsecured personal loan to raise capital. Get in touch to see how we can help.
If you own your house outright, you can release equity by remortgage. Our advisors will be able to guide you through the process and make sure you get the best rate possible.
Yes. You will need to demonstrate you can fulfil the lender's affordability requirements as well as have enough equity in your home, assuming you keep your secured loan.
Remortgaging may present the opportunity to combine the debts into one monthly repayment. Our advisors can help you to find the best way forward.
If the value of your home has increased, your equity will also. This means, if you choose, you could release some equity by remortgaging for a higher value. Speak to one of our advisors to learn more.
You may look at remortgaging to perform renovations or to use as a deposit towards another property.
It is possible to remortgage a buy-to-let property depending on the circumstances, contact our advisors to learn more or read more in our buy-to-let guide.
It is feasible to raise a deposit for a buy-to-let property by remortgaging your home.
You may also be able to switch your existing mortgage to a buy-to-let mortgage and secure a residential mortgage on another property.
Affordability will is based on the anticipated rental income as well as other factors. Read our guide on buy-to-let mortgages to learn more.
Securing a remortgage as an expat in the UK is typically more straightforward than with your first mortgage.
When remortgaging a property you own abroad, there are other complications such as tax and legal implications to consider. Don't worry; our advisors are here to help you secure a competitive deal. Read our guide to expat mortgages for more information.
Transfer of equity remortgages can be complicated.
They are required when the legal ownership of the property changes, for example, following a relationship breakdown. The sole owner will need to demonstrate they can afford repayments on their own and meet other eligibility criteria.
Our experienced advisors are here to help and help you decide the best route forward.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.