Sam Bull gives us a recap on remortgaging.
What is remortgaging and what are my options?
When your existing mortgage product is coming to an end with your current lender, a remortgage is where we will move you to a different mortgage lender. We would review your circumstances and shop around to find the most suitable deal on the market.
That might be staying with your existing mortgage lender – because they will offer you a new product – or you might remortgage to a new mortgage lender if it’s cheaper to do so. We’ll consider both options.
When is it a good time to remortgage?
The most common one is when your current mortgage deal is coming to an end. It’s usually a good time to review your circumstances six months before that deadline. We will shop around to secure that deal when your fixed term ends.
It’s also good to remortgage if you’re looking to make some improvements to your existing home – a new kitchen, bathroom or maybe an extension. Speak to your mortgage broker to look at the financing options.
You can also look at remortgaging to do some debt consolidation. You might have some existing loans and credit cards with high interest rates that cost you a lot each month. We can see if it’s worth remortgaging to get your monthly payments down.
When is remortgaging not a good idea?
Your mortgage broker will give you personalised advice. It might be that your existing mortgage lender will set a very large penalty to leave your existing product early. If it’s into the thousands and the new deal is not going to save you any money, we would probably advise you to wait until your fixed rate has ended or when your early repayment charge reduces.
It might not be a good idea to remortgage if you’ve had recent credit history issues. But again, speak to your broker. We will take a look at your credit report and advise you whether it’s worth looking at a remortgage or if it’s better to wait a few months until the credit issue is not so severe.
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Everyone’s different. You might be self-employed. You might have some credit history issues – whatever your situation, we will find the most suitable product available to you from across the whole market.
Why remortgage at the end of a fixed rate deal? What happens if I don’t?
When your fixed rate ends you will automatically go on to your mortgage lender’s standard variable rate. That rate is different with every lender, but it’s almost always much higher than the fixed rate that you’ve just been on. Being on the standard variable rate is usually very expensive.
Instead we will shop around and put you on a new deal, to make sure that you’re on the most suitable product and you’re not paying over the odds.
How do I improve my chances of getting a good remortgage?
Mortgage lenders will usually look at your last three months’ bank statements, so it would be good to make sure you’re not going over your overdraft limits, credit card limits and making sure that your credit report is nice and tidy. Avoid missing any payments or being late on credit cards or loans.
What fees are associated with a remortgage?
We try to make sure that your fees are as low as possible. There may be some solicitor fees to pay, but those are usually much cheaper than when buying a house or moving home.
The mortgage lender might charge a product fee – again we will review the whole situation to make sure that it’s worth paying those fees to save you money in the long run.
How can a mortgage broker like JB Mortgages help with a remortgage?
We’ve done hundreds of remortgages and we always look after our clients. Six months before your fixed rate ends, we will give you a call. We’ll see if you’ve had any changes in circumstances so that we can find you the most suitable product on the market.
We will handle everything – all the paperwork and the application – to take as much stress out of the situation as possible.
Think carefully before securing other debts against your home.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up with your mortgage repayments.