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Thinking of remortgaging your property?

  • Your mortgage is likely to be your largest financial commitment.
  • Remortgaging your home has the potential to save you large amounts of money.
  • Call us to discuss your options and secure the best deal based on your circumstances.
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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.

When remortgaging, all aspects of the mortgage can be changed: the amount, the term, the rate, the lender, the people party to the mortgage, the repayment type and if appropriate, whether the mortgage is on a residential or buy-to-let basis.

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.

I’m locked into a fixed rate with a penalty – could I remortgage early?

The following costs will have to be considered to work out whether the benefits outweigh the costs:

  • early repayment charge (“penalty”) for leaving the deal before it ends;
  • exit fee, which may be called something else, but essentially it is a final admin fee for closing the mortgage account with the lender;
  • costs associated with the new deal, for example, arrangement fee, valuation or solicitor fee

As part of our services, we would look at all the costs before making a recommendation. Our goal is to ensure that you’re not out of pocket in the end and you’ll save money with the switch.

I need extra money – do I have to remortgage?

No, remortgaging a property to release equity is only one of the options.

While you are locked into a deal with an early repayment charge, it may be better to take a further advance from your current lender or a so-called second charge loan from a different lender. These solutions leave your current mortgage deal in place without any changes to it.

All these options have their pros and cons, so we would like to understand your situation first and then discuss the options available to you.

How long does a remortgage take?

Switching to a new deal with your current lender without any other changes to the mortgage is normally a straightforward process. Applying for it may only take a few minutes, but the actual switch normally only takes effect on the first 1st day of the next month. The lender may also allow you to remortgage early within the last 3 months of your current deal without being liable for the early repayment charge (ERC).

If remortgaging to another lender is a more suitable solution, then the process can take up to 6-8 weeks dependent on your circumstances, the lender chosen and the solicitor’s speed.

We normally recommend that you start considering your options 3-4 months before your current mortgage deal ends. It allows enough time for shopping around, applying for the mortgage and then for the solicitor to arrange the switch.

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How can we help you?

As independent, whole of market mortgage brokers, we have access to all mortgage lenders. Using our experience and expertise, we can find the most suitable deal for you to remortgage your home.

Should you have any questions during the process, we are available from start to finish to answer your queries and help you with the necessary paperwork.

Remortgage costs

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.

Lender costs

  • 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 costs

Broker fee – dependent on the chosen broker company, it may be nothing, a fixed fee or a percentage of the mortgage amount.

Solicitor costs

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.

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Looking for a remortgage calculator?

If you are looking to compare your current mortgage deal to a new one, then look no further than our remortgage calculator. You will see how the monthly payments compare and how much you could save. Follow the link at the bottom of the page to start comparing options.

Special circumstances – case studies

Moving home and renting out current home

Mr and Mrs C were locked into a deal with an early repayment charge (i.e. a penalty) to pay for repaying the mortgage early. In their case, getting a consent to let from their current lender was a good solution, as it left their current deal untouched.

Alternatively, they could have remortgaged the property onto a buy-to-let deal, which would have been based on the expected rent. However, the cost of doing so was too high in their case.

Beware that there are lenders, who don’t accept remortgaging from a residential mortgage to a buy-to-let deal or increase the interest rate when granting consent to let.

Shared ownership

Miss S wanted to buy an additional 25% share at the end of her initial deal. First the flat’s value had to be established in co-operation with the housing association. Once the value and affordability were confirmed, the remortgage with capital raising could proceed.

Although she originally only put down 5% deposit, the increase in the flat’s value has given her enough equity that she could buy the additional share with a higher mortgage, but no additional savings put toward the purchase. This way she could use her savings to redecorate the flat.

Help to Buy

If you wish to remortgage with the government loan left in place, then you’ll need a lender who accepts this scenario. However, you can also remortgage with capital raising to repay the government loan.

Mr M and Ms K bought their flat with a 5% deposit and 20% Help to Buy loan. 2 years later they remortgaged the flat with the Help to Buy loan still in place taking a 3yr deal. At the end of it, when the Help to Buy loan’s 1.75% charge would start, they are planning to remortgage and replace the Help to Buy loan with a lower interest rate mortgage.

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