Remortgaging

Remortgaging can carry many benefits for those seeking to place themselves in a better financial position in terms of their overall commitments, or to obtain the cash they need to improve their circumstances.

You can remortgage your property to:

• Secure a better interest rate than you currently enjoy on your existing mortgage, and therefore reduce your monthly repayments.
• Reduce the term of your mortgage and therefore save yourself potentially thousands of pounds over the course of the loan.
• Release some of the property’s value, if there is enough equity in the property, and use the surplus to consolidate debts or make home improvements.
• Raise cash to use for a variety of other personal reasons – perhaps starting a business, helping family, buying another property or making a major purchase – again, if there is enough equity in the property.

Releasing equity in a property by remortgaging can be a much cheaper way to raise cash than a personal loan facility and will help you to stay on top of your budgets in the long run. Get in touch with us to see how one of our advisors could help.

Technically, you should be able to remortgage – i.e. replace your current mortgage with one from another lender – at any time. However, you should look out for factors that, while not preventing you from remortgaging, will make doing so a potentially unwise decision.

One of these factors will be early repayment charges. Especially during the last few years, many lenders will have specified a tie-in period to their mortgage deal of perhaps two, three or five years – usually coinciding with their introductory offer on the deal or even longer in some rare cases. During this time, they may impose a charge in the case of early repayment, to make up for the loss of interest earnings.

Often calculated according to a percentage of the mortgage balance, early repayment fees can add up to thousands of pounds, and you must take these, and other possible fees, into account when looking at the overall costs of remortgaging. You need to make sure that every financial decision you take produces a result in your favour, and if the costs of remortgaging outweigh the savings from a deal with a different lender, then you may be best advised to reconsider.

In purely practical terms, the best time to remortgage is when the introductory term on your current mortgage comes to an end. At this point, most deals will revert to the lender’s Standard Variable Rate (STR), which could be significantly higher than the favourable rate you had enjoyed up to that point, resulting in a sudden increase in your monthly repayments.

You could probably find a better deal with another lender, although don’t discount the idea of staying with your current lender. Some lenders may offer to transfer you to another mortgage product in their own range in order to keep your business, meaning no need for additional underwriting, recalculations of the permitted loan or new property valuation (unless it would be to your advantage, and the lender offers it as part of the deal).

Looking at a new mortgage to replace your current arrangement is much like considering your first mortgage – there are several factors to take into consideration that will vary according to your circumstances, and whether remortgaging is the best idea for you will depend on how they all stack up.

Firstly: how much do you want to borrow? If you are simply replacing one mortgage with another, then this will be the balance outstanding on your current mortgage. However, many property owners use remortgaging to borrow more (especially if the value of the property has increased) to raise money for home improvements, a major purchase like a car, or one of many other reasons.

Next, what will be the term of the new mortgage? Will it last up to the same point as your current mortgage, or will you look for a shorter or longer period? And what will be the term of the product, or introductory period? Deals are usually set for 2, 3 or 5 years, or occasionally 10 years for longer-term plans. You’ll also need to consider the product type, i.e. fixed rate, tracker rate or a discount deal.

When looking at a remortgage product, most people will focus on the interest rate. While this is obviously important, as it plays a major part in the cost of the mortgage over time, you do need to consider the other peripheral factors around the mortgage as well. For instance, will the new mortgage carry high arrangement fees, or will you have to pay a large early repayment fee on your current mortgage? Will the new mortgage require a repayment fee if you want to switch again when the term of the deal comes to an end, or do you want to risk tying yourself in for a long term? And finally, will you have the flexibility in the new mortgage to make overpayments or early part-repayments from time to time without a penalty?

All this can seem like a labyrinth to those unused to looking at all the factors involved with a mortgage. If you would like a second opinion, or help to understand your options, or perhaps to find products you hadn’t considered, please do get in touch today for free initial advice.

When you look at all the circumstances around your current mortgage deal, you may conclude that now is not the right time to remortgage, or that it may simply not be financially viable. Typically, you will be tied into a mortgage for a set time period of between 2 and 5 years, during which time you will be obliged to pay early repayment charges if you choose to move to another lender. This sum could amount to several thousand pounds.

You might also want to reconsider remortgaging if the size of your loan is not large enough to result in a financial benefit by switching. Sometimes the new lender’s arrangement fees and other set-up costs will outweigh the savings made in interest payments by switching products, and a new mortgage could cost you more in the long run.

The remortgaging process is in many ways very similar to that of obtaining a standard mortgage when you buy a house, but in a few regards, it is a little simpler.

As you would expect, your property will need to be valued, and you will need a solicitor to handle the transfer of deeds and also to ensure all contracts are as they should be. However, it’s now quite common for the lender to offer these as part of their overall service in a ‘fee-free’ remortgage deal.

Your application will be submitted to the lender as usual and, as it is for a standard mortgage, they will make their own assessments and checks as to the affordability of the loan, and your creditworthiness – involving a credit record check with one or more of the main credit reference agencies in the UK.

Once your application is approved and you receive your mortgage offer, if all legalities are deemed to be in order your existing mortgage will be paid off by the lender and your new mortgage will start. The whole process of remortgaging does not take a set amount of time and varies from lender to lender; subject to any complications, it could take on average between 4 to 8 weeks to complete.

The costs of remortgaging can in some cases be quite minimal, as this is a competitive market with a range of lenders all keen to attract your business. You’ll find that many products come with a range of offers, such as free mortgage valuations and a free legal package to cover the conveyancing, but this will not be true in all cases.

Some lenders will require you to cover your valuation and legal costs, perhaps in exchange for a better interest rate. In the long term, if you can afford the up-front charges, this might work out better for you. You may also need to pay mortgage arrangement fees and broker’s fees on top of this, as well as an early repayment fee, if applicable, and any admin fee for closing your current mortgage account.

Our mortgage advisors will be aware of all costs associated with the mortgage products under consideration and will take them into account when discerning which remortgage deal will be the best for you.

An important factor to consider when looking at a remortgage is the number of products on the market that are offered completely free of fees. With these deals, you will not have to pay any arrangement fees, and the lender will cover the costs for valuation and legal work. You may also find some products offering a small amount of cash back to cover any admin charges from your current lender for closing down your existing mortgage.

However, it’s worth remembering that a fees-free package might not always be the best product for you in the long term. Talk to one of our mortgage advisors to find out what could be the best deal to suit your circumstances.

One of the most common queries we get at The Mortgage Centres is whether a borrower can get a remortgage of up to 95% of the value of their property. Typically, most lenders will be willing to lend up to 90% of the property value, but, as ever, this is an inexact science, and you will find some lenders who will only allow an 85% loan-to-value ratio, while others will be willing to go to 95%, depending on your wider circumstances.

Lenders will always apply their own criteria when it comes to how much they are willing to lend, checking the loan’s affordability in comparison to your income and assessing your financial commitments. For example, if the loan contains an element of capital-raising to consolidate existing debts, this may affect the loan-to-value they are willing to offer. Also, if your property is a Buy-to-Let, then different limits will apply.

Check with our team to find out what limits might apply to you, or if your application is likely to be uncomplicated.

Yes, you can, as a shared ownership mortgage is treated in just the same way as a standard mortgage. The only obstacle will be a limit in your choice of options, as not all lenders offer shared ownership mortgage deals.

The right lender to approach will vary according to your circumstances and requirements. Our specialist mortgage advisors will fully assess your situation and show you what all your options will be. Get in touch today for free initial advice.

Yes, this is absolutely possible, but remember that lenders will make their assessments based on the same criteria as for a standard Buy-to-Let mortgage. Instead of looking mainly at your personal income, they will place most weight in their calculations on the likely value of the monthly rental income on the open market, as well as the property’s value and the amount of equity in the property.

A member of our experienced mortgage team will be able to assess your full circumstances and give you an unbiased opinion on possible savings in your monthly payments and whether you can release the equity tied up in your property.

This is possible, but you need to bear in mind that not all lenders offer mortgage products for people borrowing under the government’s Help to Buy scheme. So, you need to pay careful attention to what exactly is available, and the terms of the new loan compared to your existing deal.

Depending on where you are in the timeline of your current mortgage, a lender will consider that you have more than one commitment on the property to repay, despite the loan-to-value of the remortgage being lower than if you had a standard mortgage. The process might not always be straightforward, but whether you are on the original Help to Buy 1 or subsequent Help to Buy 2 scheme, it should certainly be possible to get a remortgage deal.

Our expert team of advisors have an in-depth knowledge of the Help to Buy scheme and all the details surrounding it and will know precisely which lenders could offer the most suitable deals for your remortgage plan.

Yes, it is possible for you to get a remortgage on your property if you are currently in an interest-only deal, However, as these types of mortgages are considered a higher risk by the regulator, there are some strict criteria that you will need to adhere to in order to succeed.

Lenders normally only consider an interest-only remortgage under these circumstances:

• The borrower can show a higher level of income
• The loan-to-value on the mortgage is maximum 75%
• There is a significant amount of equity in the property
• The property value is above their stipulated minimum

To know for sure if you will be able to qualify for an interest-only remortgage, please contact our expert team of advisors, who will be able to give you reliable, independent advice on all your options.

The rates and products available to you will depend entirely on your individual circumstances – your income and outgoings, other financial commitments, your credit history, the property value, the amount of equity in the property and the loan-to-value (LTV) ratio of the mortgage.

The mortgages market is highly competitive and constantly evolving – the best rates can come and go very quickly, without notice, and it takes a keen specialisation in this sector to know where to look.

One of our experienced advisors will be able to look at every aspect of your situation – your current and future needs – and provide you with an unbiased recommendation for the most suitable remortgage deal to meet your requirements. It might be that you would be best going with a shorter-term 2 or 3-year fixed-rate deal, or that you need a longer term fixed-rate plan lasting 5 years or more.

As whole-market brokers, we have access to many mortgage deals and lenders that you won’t see on the high street, often on an exclusive basis. Whatever your needs, we are best placed to move fast to efficiently secure the best deal for you.

As before, the options available to you will depend on your individual circumstances, but the best tracker rate mortgages are very rarely available on the open market. Instead, they are offered by specialist lenders who will only work through trusted brokers and intermediaries such as ourselves at The Mortgage Centres, and who will have varying criteria when it comes to accepting an application.

In the highly competitive and regularly shifting mortgages market, the best deals may appear and disappear quickly. It takes a thorough knowledge of the industry and strong relationships with lenders to know who to approach and what the best deals will be.

Our expert advisors will be able to let you know if you are eligible for a tracker remortgage with the best rates available, and what terms you should be able to expect. Get in touch today for free initial advice.

The best mortgage lender at any point will largely depend on which lenders are offering what products at the time you are looking, and which of those products will be best suited to your particular requirements. And remember, the lending market is a two-way street – those lenders offering what might be considered the ‘best’ deals will all also have their own individual criteria for assessing applications and may not be willing to lend to you, or lend all of what you are asking for.

The mortgage lending sector continues to shift, with established providers varying their products or creating new offers in response to the market and new challenger banks entering the sector, so you should remember that what might be the ‘best’ lender in a chart, or according to one set of criteria, may not be the best one to meet your needs. And also, the best lender for you might not be the best lender for the next borrower, depending on their individual situation and requirements.

We feel the word ‘best’ in this context can be misleading, and sometimes damaging if it influences a borrower to go with an unsuitable product. In our opinion, the best lender for you will be the one who most closely meets your needs, offers the most suitable product for your circumstances and does so with good customer service.

The term Product Transfer is applied in the industry to the process whereby your mortgage remains with your current lender, but the result is a change in your interest rate. This usually happens when you are nearing the end – or at the end – of the deal period, before the scheme reverts to the lender’s Standard Variable Rate.

Instead of remortgaging with another lender, it can be advantageous to remain with your current provider, if they are willing to offer you a better deal to retain your business. The main benefit is that if you are simply switching product, and not borrowing any additional funds, then the lender will not need to make affordability checks, nor carry out any additional underwriting, making the process very simple.

However, while it is a competitive market, and many lenders are more flexible and proactive in trying to retain customers, staying with your current provider may still not be the best course of action, and you could find the most suitable deal for your circumstances with another provider. At The Mortgage Centres, we are constantly in touch with shifts in the market and new products becoming available. We will take into account any offer your current provider is willing to make and weigh it against other suitable products on the market, together with any costs or fees involved when we make our recommendations to you, so you can be confident you are getting the whole picture and can make an informed decision.

You can spend a lot of time researching mortgage rates online, using comparison websites and lender’s own product listings, and also studying best-buy charts in an effort to narrow down the best mortgage interest rates for a remortgage, but still never find the best deal for your circumstances. This is because there are numerous specialist mortgage lenders who do not advertise online or appear on the high street, who offer competitive rates, but only consider business through established intermediaries such as independent brokers like ourselves.

At The Mortgage Centres, our professional brokers are able to search across the whole of the UK market, with access to exclusive deals not found through public channels, to find the right remortgage product for you.

Remortgage Specialists

Between them, our team has a huge amount of experience in helping people in all kinds of circumstances to find the most suitable remortgage deal to meet their needs. Why not get in touch today to see how we can help you.