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5 Top Tips For Remortgaging Your Property

There are many things to think about when remortgaging your property and it’s important to have all of the details so you can take the right steps and get the best deal. That’s why we have written 5 top tips that will help give you the information you need so you are fully prepared to remortgage. 

1) Do your research and don’t just stick with your current lender

It’s similar to car insurance you wouldn’t just renew with your existing insurer without doing some other research and comparisons to see if you can better deal somewhere else. It can be tempting to stick with who you’re with to save time and effort, but the mortgage market can be highly competitive, and you could find a better remortgage deal searching through a wider range of lenders. 

2) Seek advice on the best option for you

You might not be an expert on remortgages but there are people out there that are and could give you some key advice. Whilst you can research the market for yourself going through a remortgage broker can save you time and money. They will research the entirety of the market to find the most suitable deal for you, some of which are only available through a mortgage broker and not on the high street. 

3) Consider the fees involved with remortgaging 

When you decide to remortgage your property it can be easy to forget the amount of your fees you can incur by doing so. It’s important to not just look at the rate but work out the overall cost of the mortgage and seriously consider whether you will be able to afford it. Some fees you should look out for include: Early Repayment Charges, Exit Fees, Legal Fees and Valuation Fees. Make sure all your finances are in order and don’t rush the decision to remortgage without doing all the calculations. 

4) Don’t leave it too long 

If you’re on a fixed term mortgage deal you need to secure a new deal before your current one comes to an end. If you don’t your lender could move you to the standard variable rate which can end up costing you money. The ideal time to start considering your remortgage options if that’s the path you want to go down is 3-6months before your deal comes to an end. You can remortgage online by searching for the best deals and options available to you. If you bought your original mortgage through a broker, they should be in contact to remind you that your deal is due to expire within plenty of time. 

5) Take into consideration any changes to your finance or lifestyle

It’s essential to consider whether there have been any changes to any of your personal circumstances since you secured your last mortgage. For example, has your income changed and you are getting paid more each month? Have you had a child? Have you fully paid off a loan? Thinking about all these factors will help ensure you can keep up with your future monthly remortgage payments. 

Why Should You Remortgage?

Here are a few reasons you may want to remortgage, if this sounds like you then remortgaging could be worth some serious thought and research.

• You want a better rate – if you are tied up in an initial deal you might have to pay an early repayment charge. This shouldn’t put you off a remortgage though as the savings can be huge, but you need to do your calculations before making the jump. 
• The value of your home has increased – if the value of your property has risen a lot since you got your mortgage you might be eligible for much lower rates. 
• You want to borrow more money – your current lender might not be willing to lend you extra money or the terms aren’t very good. Switching to a new lender might let you raise the money cheaply on low rates. The most widely accepted reasons to raise money are for home improvements and paying off other debts. 
• You want a more flexible mortgage – you might want to be able to miss a payment. Whether that be because you’re changing jobs, going back into education etc there are mortgages out there which will let you take payment holidays. 

When Should You Remortgage?

To ensure you have the best deal and are not paying over the odds it is recommended that you remortgage your property every few years.

If you have gained some equity in your home and repaid a good piece off your mortgage over the past few years, changing to a different mortgage can reduce the interest you’ll pay each month. This is because you are able to take advantage of the best deals.

The UK’s Finance mortgage lending trends from May 2019 saw 21,370 new remortgages with additional borrowing which was nearly 20% higher than the same month in the previous year.* So, if you have been consistent with your mortgage payments and the lender can trust you will continue to make repayments, you can apply for additional borrowing with your remortgage when looking for extra money. Don’t rush to do this too soon as lenders could think you just want a mortgage for the extra money and turn you down. 

How Long Does Remortgaging Take?

There is no official rule for how long it can take to get a remortgage but typically it can take between 18 and 40 days from the application to the mortgage offer. 

What Barriers Can Stop Your Remortgage?

Like when you apply for your first mortgage there are a few reasons you might not be accepted for a remortgage which being aware of can help you change so you can apply with a good chance of success in the future. 

• Being in negative equity- it is highly unlikely you will be able to find a mortgage deal if you are in negative equity. 
• Having issues with your credit rating- this can have an affect on your chances of a new mortgage. If you are unsure how to improve your credit rating do plenty of research on the best ways to do it. 
• It can be more difficult if you are self-employed- you may struggle to get a remortgage if you can’t provide sufficient evidence of your income. Also, be aware that lenders won’t allow you to self-certify. 
• A lot of bigger banks will lend into retirement but will have an upper age cap, most will ask for the loan to be repaid before your 70th or 75th birthday. Therefore, if you’re 55 or over you will have to repay your mortgage in 20 years instead of the usual 25 years. 
• Lenders often request higher salaries relative to loans than in previous years, and they will consider your outgoings as well as your income when deciding whether to offer you a mortgage. 

Remortgaging for buy to let 

Remortgaging is a good way to raise money if you are interested in investing in a buy to let or buy a second home. This is because remortgaging will release equity in your property and raise what you need to get a deposit for a buy to let mortgage. 

Other Alternatives When Looking to Remortgage

You may be able to switch your mortgage deal with your current lender. This will avoid any unnecessary costs. Many lenders will allow you to switch your mortgage deal reasonably frequently. This is called a product transfer.

If you are remortgaging to raise funds your current lender may allow a further advance on the product you are currently on. Securing short term debts against your home could increase the term over which they are paid, therefore increasing the overall amount payable.

*Source: UK Finance (UKF) Mortgages Trends update – May 2019

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.  YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

This article is for information only and should not be seen as advice or a recommendation to take action.