Remortgaging is the process of switching from an existing mortgage arrangement to a new deal.
During this process, you can choose to remortgage with your current lender, or you can search for a new lender, usually with the intention of finding a lower interest rate or better mortgage terms.
While many people remortgage for financial reasons, there are multiple reasons you might choose to remortgage your property. We have listed some of the most common below:
Your current mortgage term is ending.
The typical mortgage term is between two and five years, meaning, at the end of this period, you need to remortgage to avoid being placed onto your lender’s Standard Variable Rate (SVR). SVRs are often far more costly than fixed terms, so most people remortgage before they incur the higher rate.
To secure a lower interest rate.
If you’re exploring the mortgage market, you might find a lower interest rate than what you’re currently paying. However, if you’re considering switching to a different mortgage provider, it’s crucial to examine the Early Repayment Charge (ERC) on your current loan before making the switch. ERCs often range between 2% and 5% of your outstanding loan balance, so changing lenders can sometimes be financially disadvantageous.
You need more money for expensive one-off payments or major home improvements.
Many people in life, at some time or another, find themselves in need of a little extra cash. If your current lender doesn’t approve your application to increase a loan, a new lender may be able to accommodate you, securing the new debt against your house.
Your relationship finishes and you want your mortgage changed from joint to single.
It’s speculated that as many as 40% of marriages end in divorce. In some instances, the family home will not be sold as one party decides to remain at the property. If you decide this is right for you, you can transfer ownership of the property into one person’s name through remortgaging. Conversely, you can also add a new person to the mortgage in much the same way.
Switching between fixed and variable rates.
Depending on your attitude towards risk, you can move between fixed and variable rate mortgages in response to the market. For example, if you’re anticipating a reduction in the base rate, you might choose a variable rate mortgage until the lower rate comes into effect.
You want to consolidate debt.
When debt from credit cards, store cards and loans start to pile up, it can feel very overwhelming. Especially if you’re missing payments because of the volume of different lenders chasing you. A debt consolidation mortgage offers a way to make the process of repaying debt simpler, less stressful and more manageable.
Depending on what you’re trying to achieve, Remortgaging can be quite simple, taking less time and effort than sorting your initial mortgage.
However, before agreeing a new deal with your existing lender, it’s often a good idea to check what other deals are available to you, as you might find a more favourable rate with a new provider.
At Your Mortgage People, we can help with your search. Our advisors search the whole of market to find the best deal for you.
After you’ve identified a deal that’s right for you, you’ll have to submit your application to the lender. Your application will be reviewed, and the lender will decide whether to offer you the loan.
If you’d like help with the process of remortgaging, Your Mortgage People can help you find the best deal and speak to the lender and legal teams on your behalf.
Contact us today on 01489346624 to get started.
If you’re worried about the stress and complexity that comes with remortgaging, having a qualified broker by your side can make the world of difference.
Their guidance can be invaluable, simplifying your journey from start to finish and ensuring that you make informed decisions every step of the way.
Fill out the form below to begin the process now:
If you’re using an experienced broker to find you a great deal, you will have to cover some additional costs.
This covers the cost of your application and allows the broker to search the market for the best deal on your behalf.
Although costs vary depending on what you’re trying to achieve, a standard remortgage will often come with the following fees:
Application fee: £150-250
Broker Completion fee: £500 – £1000
This covers the cost of your application and allows the broker to search the market for the best deal on your behalf.
A Subprime Mortgage is designed to accommodate people who do not meet the criteria required by high-street mortgage lenders. This isn’t only for individuals who have defaulted on payments, it’s also for those who lack any kind of borrowing at all.
A Product Transfer usually occurs when a deal is due to expire and involves applying for a new mortgage while staying with the same lender in the same property. This means you’ll get a new mortgage for the same amount but at a different rate.
A Homeowner Loan (also known as a Secured Loan or Second Charge Mortgage) allows you to use the value of your home to borrow lump sums of money, with the amount you’ve borrowed secured against your property or home.
If you want to know more, why not check our guide to mortgage terms or FAQs section. We cover everything you need to know, explaining mortgage terms and commonly asked questions.
Alternatively, speak to one of our advisors to learn more about remortgaging. Fill out a contact form by clicking the button below.
