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Remortgaging - What You Need to Know

If your current mortgage agreement is coming to an end or has not worked out to be financially viable, remortgaging your property could be an option for you. Whether you are looking to cut costs, help raise some capital, fund home improvements, or bring in some extra cash, our guide below will help explain the remortgaging process.

What does remortgaging mean?

If you currently own a residential property you can opt to remortgage your property, even if it’s owned outright. If you choose to remortgage, you will be able to move away from your current mortgage to another provider or choose a different deal. To do so, you should first contact your current mortgage lender and see what they may be able to offer.

Why should I remortgage?

As a homeowner, there are a variety of reasons you might want to remortgage your property. When remortgaging, you can raise money against your current property, or change your existing mortgage to a more competitive rate. Remortgaging is a popular option, especially when you want to raise the capital for another venture or bring your monthly payments down. It is usually best to wait until the end of your fixed-rate or discounted deal that you are on.

How to get the best remortgage deal?

If you are thinking of remortgaging, you should start the process sooner rather than later. You may be locked into your current rate, but this does not stop a lender from offering you a deal that you can take on once your current deal comes to an end. Don’t be loyal to your current lender, shop around, and see what other offers are available. Speak to a mortgage adviser as they may have some exclusive deals as well as being able to shop around with different lenders.

What type of remortgage should you choose?

When choosing to remortgage your property, make sure you explore all the options instead of sticking with what you already have. As well as the standard repayment mortgage the most popular options when remortgaging are a fixed-rate mortgage, a standard variable rate SVR, or an interest-only loan. Each of these options has its own benefits, so depending on your requirements, one may be better than the other. Make sure you check the fees payable for each, any penalties you may incur such as an early repayment charge, and what the cost will be to you.

What fees will there be if you remortgage?

Before remortgaging your property, make sure you have checked the terms and conditions of your current mortgage. More likely than not, there will be fees which may affect your decision making. Your current contract may require you to pay an early termination fee if you pay off your mortgage early. Bear in mind that, in most cases, there will be fees to pay in relation to your new mortgage. These could include:

  • Early termination fee payable to your current lender
  • An exit fee payable to your current lender
  • Potential mortgage fees
  • Mortgage broker fee
  • Valuation and conveyancing fees

Will I be credit checked?

As with any type of borrowing, the lender will run a credit check on you as soon as they process your application. The higher your credit score, the more likely they are to lend to you. If you want to check your credit score, you can run a check through various credit referencing agencies.

Watch out for overpriced add-ons

When remortgaging your property, you may be offered some additional products, such as home insurance. These products can be beneficial and may well be worth purchasing, however, make sure you and your broker discuss the options available to you, so you are getting the product that is right for you.

Benefits of using a mortgage broker

Instead of going directly to a bank, make sure you speak to a mortgage broker first. A mortgage broker has access to a variety of lenders, meaning they can give you access to a more suitable deal and they are not limited to just one product or lender. This means they can compare what each lender is offering and may find you a better interest rate than if you applied direct, allowing you to save money. Mortgage brokers are also unbiased, meaning they can look at your circumstances and make recommendations tailored especially for you. In some instances, you may find a mortgage broker has been given access to an exclusive rate which is not even available for the bank themselves to use. Overall, a mortgage broker will save you time, money, stress, and help to put you in the best position possible when remortgaging your home.

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Based in Leeds, One Mortgages & Protection Limited offers impartial and unbiased advice to customers UK wide, no customer is too far away to help.