Why you might want to consider a remortgage?
When you took out your current mortgage deal, it was the best possible based on your circumstances. But have your circumstances changed or is your current deal finishing soon? In either case, you might want to consider remortgaging your home or investment property in order to get the best mortgage deal again.
What is a remortgage?
A remortgage is simply replacing your current mortgage deal with a new one. If your mortgage deal is about to finish or you’d like to take a new deal due to a change in your circumstances, you can switch to a new mortgage either with your current lender or with another provider.
Just to remember, all of the above are subject to terms and conditions and your circumstances may restrict the number of lenders who can be considered. Get in touch and we’ll be happy to assess your options for free.
How does remortgaging work?
You have 3 options to choose from when your current mortgage deal finishes.
- do nothing and just move automatically onto the current lender’s standard variable rate (SVR);
- take a new deal from your current lender by choosing one from the rates they offer to you;
- look around to see what is available from other lenders and choose a deal most suitable for you.
Taking a new deal from your current lender is normally a fairly straightforward remortgaging process. This is true if you don’t change any of the details apart from the interest rate. However, if you are remortgaging a property to release equity or want to add someone else to the mortgage, then the remortgage process with your current lender requires the same full underwriting as remortgaging to another lender.
Although a lot of deals offer free valuation and free legal services, it’s not an absolute rule, so make sure that you check the costs involved.
- Early repayment charge and exit fee from your current mortgage lender
- Application fee, arrangement fee, valuation fee, solicitor fee, money transfer fee from the new lender.
Remember, some of these costs may not apply in your case.
Broker fee – dependent on the chosen broker company, it may be nothing, a fixed fee or a percentage of the mortgage amount.
In most cases the lender offers the legal services for free, so you don’t need to engage and pay for your own solicitors. In some cases, however, you do need your own solicitor for the remortgage. In addition, if there is a change in who is on the mortgage and the title deeds, you would have to pay solicitor fees even if the lender gives the legal services for free.
Other parties costs
These may include Stamp Duty Land Tax and Land Registry fee (or LBTT and Land Register in Scotland), money transfer fee, admin fee payable to the freeholder and/or to the management company in case of a flat.