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Remortgage – What You Need to Know
When you are considering remortgaging your home, there can be a lot of factors to consider. Having a clear idea of the facts, and the options that you have available can help you to make the best possible choices for your situation and unique financial circumstances. You’ll need to consider how much remortgaging your property might cost and whether it will be affordable for you.
Why Should I Remortgage?There are several reasons that homeowners choose to go for a remortgage deal. Depending on the rate on your current loan, and the one you can secure on a new deal, remortgaging is a way of possibly securing a better Annual Percentage Rate to save you money on your interest over the length of the mortgage term.
You do need to balance this against any early repayment fees that your current lender might apply, to ensure that the move really does leave you better off. These fees can be as much as 5% of the total loan, a significant amount.
Other reasons to consider a remortgage are to do with changes in your personal circumstances. For example, you may have been on an interest-only mortgage for a while, and now want to switch to one where you can pay off the balance. In this scenario, you may only need to ask your current lender to switch you over.
However, if your financial circumstances are a lot different from when you initially took on your loan, it may be worth reviewing the situation with a qualified advisor to be sure your existing mortgage is still the right deal for you.
In some situations, the reverse could be true – you may want to go from a repayment to an interest-only deal, for example if you’ve had your working hours cut, are paying for building work on the house or having a baby and going down to one full-time working wage. This often means that you will need to change lenders.
A need to borrow more money is also sometimes a reason to change your deal. If your current lender’s terms aren’t great, or they refuse the increase you want, remortgaging may be your route to proceed.
Or perhaps you want to overpay your mortgage, having gained a better paying job or come into some inherited money. Some mortgage deals do not allow overpayment or come with financial penalties if you choose to do so, prompting you to make a switch.
If the value of your home has risen rapidly, a remortgage may also be a good choice. This circumstance means that your LTV (loan-to-value ratio) may be much better, meaning you can access more suitable deals that will cost you less in interest.
Are you Ready to Remortgage?Remortgaging a property is far simpler than buying one; there is no property to find but there may be fees to pay.. That said, you should do some research to ensure that it’s worth your while and that you get a better deal on your remortgage agreement.
If you want to switch to a variable rate to take advantage of current market conditions, a Mortgage Broker will determine if it’s best to stay with your current lender or move to another lender with more suitable products. On the other hand, if you’ve seen a better deal with another lender, a Mortgage Broker will help you assess its true value.
What Fees Will I Pay on a Remortgage?Although remortgaging your property is significantly cheaper than buying your first home, there are still fees to pay that you might not realise. When calculating your remortgage arrangement costs, you need to consider Arrangement Fees, Booking Fees, Valuation Fees, and Legal Fees.
How do I Get the Right Remortgage Deal?With all of these situations, it’s important to fully understand all the options available to you and exactly what it will cost. Professional, impartial guidance can be very valuable in supporting you at this point. That is how we as a Broker can help you today.
THINK CAREFULLY BEFORE SECURING YOUR DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.