Should I remortgage now and how easy is it?
If you’re wondering how a remortgage works and how it could benefit you, read on…
Switching mortgage providers is called a remortgage, you don’t move home but you do change lender, it’s like switching a service provider such as your broadband or electricity.
Why would I remortgage?
At the end of a product tie in period (such as a fixed rate), you will automatically revert to a standard variable rate, which is usually much less attractive.
Can remortgaging save money?
Definitely, that is the main purpose of a remortgage. Other reasons include capital raising, buying out equity holders (such as ex partners) and gaining peace of mind by remortgaging to a better fixed rate with another lender.
Can I remortgage to raise cash to spend?
Yes, you can apply for more money than your current mortgage total although some lenders have limits on the purposes of raising capital.
Can I raise money to pay off other debts such as credit cards?
Yes, although not all lenders will accept this. Be aware that some brokers whose status is as Appointed Representatives (as opposed to Directly Authorised) may be restricted from advising you on a full range of lenders. The benefit is that the interest rate on a mortgage is lower than on most loans or credit cards. If you add it to your mortgage you will be paying it off over a much longer period of time and therefore will probably end up paying more in the long term. However, most lenders allow you to overpay up to 10% of your mortgage each year without penalty – so in most cases you can use this option to pay more and pay off the debt over the same term at a cheaper rate.
When would I remortgage?
Typically any time when there is no Early Redemption Charge (ERC) on your current mortgage, such as the end of a fixed rate period or if you are already on a standard variable rate. Most find it prudent to look into remortgages four months before their existing deal ends to secure attractive interest rates.
Is it easy to remortgage?
Yes, it’s quite simple. First we establish if it’s in your best interest, then we will select a new lender beneficial to you and organise everything from therein. A solicitor will need to be involved but most lenders offer a fee free service for this.
What do I need?
You will need to prove affordability to the new lender and the usual criteria such as identification and proof of address.
When I’m remortgaging who values my home?
The new lender will value your home. The lender may even do a ‘drive-by’ which means they just check there is a house there and it looks about the value you declared! Some may just do an estimated valuation making the process even quicker.
Do I need to organise a lot of paperwork to remortgage?
No just proof of income and affordability. Your mortgage adviser is responsible for their advice, so they will ask you a series of questions either over the phone or face to face.
How long does it take to organise a remortgage?
It generally takes around eight to twelve weeks but often quicker depending on circumstances.
How do I know if I have a good remortgage rate?
Don’t get caught out hunting for the ‘best rate’. The best rate is not necessarily the best deal as it might come with extra fees or hidden charges or even higher Early Redemption Charges. We will tell you the best mortgage deal for you, not the best mortgage rate.
The Premier Financial Group