Getting remortgage advice from an experienced and qualified mortgage broker is something you should definitely consider. Here we outline the reasons why people remortgage, the remortgage costs involved and the benefit of using a broker.
Why get mortgage advice?
There are over 70 mortgage lenders offering over 1000 different mortgage options. A mortgage is probably the largest financial commitment you will ever take out, so you want to make sure the mortgage is suitable to your current circumstances and also fits with your long term plans. Mortgage brokers can review the options provided by your existing mortgage lender and compare that against what other lenders are offering to make sure you get the most suitable mortgage.
What is a Remortgage?
A remortgage is available to someone who already has an existing mortgage and wants to change the mortgage for a variety of reasons.
Your current deal is about to end.
Let’s start off with one of the most common reasons to remortgage. Many of the cheapest mortgage deals will only last often between 2 and 5 five years this is the typical length of time offered on most fixed rate products.
When it comes to an end of your current mortgage product your lender will generally transfer you onto their standard Variable Rate which will often be much more expensive each month. If you are coming up to the end of your product, you want to be ready to remortgage so you can find a cheaper rate before your existing deal finishes. We would recommend you seek remortgage advice 3 months before your initial rate finishes.
Worried about interest rates going up?
So maybe you are worried about rates going up, it is always best to seek professional advice regarding this as you could be worried for no reason at all! However rates do rise and fall as we have all seen in the past, if you can secure yourself a low fixed rate now this could save you thousands in the long run and give you an advantage if rates were to ever rise.
Your homes value has gone up.
Maybe the value of your property has increased since you last took out your mortgage, you may find that you have a lower Loan-to-Value, and therefore eligible for much cheaper rates and again this could save you hundreds if not thousands of pounds.
You want a better rate.
You might be tied into a fixed rate deal which might not be considered competitive in this current market and you may have to pay an early repayment charge which can often range between 2-5% of your outstanding mortgage to get out. However this doe not mean you should not consider remortgaging as you could save yourself thousands of pounds in the long run. Getting good remortgage advice is key here and fully understanding all the remortgage costs to make a decision.
You want a flexible mortgage.
Maybe your circumstances have changed and you want a mortgage that will allow you to make large overpayments and also have the ability to take payment holidays or make underpayments in the future.
You want to borrow more.
Now this is the most common reason people want to remortgage because maybe you want to:
Complete some home improvements like have a new kitchen fitted, or maybe you need an extra bedroom so you are considering an extension or loft conversion.
Consolidate some of your debt to reduce your outgoings.
Raise money on your property to gift a deposit to your children so that they can get on the property ladder themselves.
You need to remove an Ex/Friend from the property (Transfer of Equity)
Maybe you purchased a property with a friend/ex and they are now looking to move on to purchase a property in their own name but they want their share of equity out of the property. You can raise the money out of the property to pay off your friend and transfer all off the property into just your name. This can also be done for a relationship breakdown where you want to go your separate ways but one of you will be keeping the property.
You want to switch from interest-only to repayment mortgage.
If you have an interest only mortgage and have no repayment strategy in place you could get remortgage advice to change to a repayment mortgage. By remortgaging you will find that your repayments will be more expensive each month as you are now repaying some of the capital each month but come the end of your term you will be mortgage free. You may want to consult your existing lender though as they may offer this free of charge.
What are the Remortgage Costs?
As you can see, there are several reasons to remortgage and a couple of ways to achieve this. General remortgage costs include:
Valuation Fees – Many remortgage deals do not charge a valuation fee, especially if you are planning to remortgage to a high street lender and the borrowing is low when compared to the property value. However some lenders do charge these fees and the cost is linked to the property value.
Lender Arrangement Fees – Depending upon the remortgage deal arrangement fees maybe charged. In most cases you can pay this on completion or add to the mortgage (interest maybe charged if added).
Broker Fees – If you use a broker there maybe fees charged and you should clarify what is payable and when these fees are payable.
Legal Fees – These can sometimes be paid for by the lender and the cost depends on what you are trying to achieve, a Transfer of Equity will cost more for example.
The ways to remortgage
Go Direct to a bank – If you have a good credit score you could visit a local bank, however they will only be able to offer their products and it may not be the most suitable when compared to the whole market.
Use a mortgage broker – Maybe you don’t want the stress of doing it yourself and you would prefer to get a broker involved to do it all for you.
Why use a mortgage broker?
Whole of Market – Brokers can source a mortgage from the whole market, whereas if you go direct to a lender they will only be able to offer their limited range.
Flexibility – Brokers can be available at different times, in the evening or weekends to suit around your work commitments.
Protection – many mortgage brokers are able to offer protection products such as life insurance and serious illness cover to make sure the family is fully protected.
Experience – Mortgage brokers deal with many clients, with different needs and different complex situations. This experience allows them to source a mortgage, whereas a high street lender may not be able to help you.
Get Remortgage Advice
The specialist remortgage advisers at The Money Hub would be happy to discuss your needs and find you a suitable mortgage from the market. We will always detail all the remortgage costs, so you are fully informed. Please give us a call or complete the enquiry form where you can then schedule a call with an adviser at a suitable time.
Mortgage brokers provide remortgage advice to clients. The benefit of discussing your options with a mortgage broker is that they can access the whole market of mortgage products and source the most suitable deal for you rather than going to a bank directly which can only offer their products.
This depends on many factors. Typically you have to pay for valuation fees, lender fees and legal fees however many lenders offer incentives to win business and therefore these fees may not be charged. It is worth speaking to a mortgage broker who can compare the fee charging mortgages vs the fees free option and calculate which is the more favourable option.
This really depends upon your circumstances. If you current rate has expired and you are on the lenders standard variable rate it is worth exploring your options. If you want to raise extra money for home improvements or debt consolidation this could be achieved through a remortgage, a further advance or a secured loan. A mortgage broker could investigate all your options, the overall cost and give you advice on the best route.