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Remortgage - Frequently Asked Questions
Listen below as Richard Crow talks all about remortgaging.
In less than 15minutes, you’ll know a lot more about getting your remortgage sorted.
What is remortgaging?
Remortgaging is essentially when you own a property with a mortgage and set out to get a new mortgage deal.
When is it a good time to remortgage?
There are various times when you might decide to remortgage. The most common one is when your current deal is coming to an end. You might be on a particularly bad deal because of your situation at the time you took out the mortgage, and you want to find a new rate. Or, possibly, your property’s value has gone up a lot, increasing the equity you have.
Alternatively, you might be worried about interest rates going up. We have quite a few people coming to us at the moment because of this. They’re still in their fixed terms but they want to explore what would happen if they were to switch to lock in a new deal for five years.
You might have come into some money and wish to overpay or clear your mortgage. Possibly your current lender won’t allow this, so you want to find a more suitable product. Or perhaps you want to switch from interest only to a repayment mortgage – some clients do this to make sure the debt is paid off by the time that they retire.
Another popular reason to remortgage is to borrow more, perhaps to fund some home improvements or to consolidate debts. You can move your debt onto your mortgage – but it’s important to explore why your financial burden has got out of hand, to make sure it doesn’t happen again.
When is remortgaging not a good idea?
There are a few situations where remortgaging might not work for you. One example is where your mortgage debt is really small, so a change in rate won’t make much difference. Or you might have a very high early repayment charge which means it’s going to cost you a lot of money to leave your current lender.
Maybe your circumstances have changed and you won’t be able to get a mortgage, or your rates will go up a lot perhaps due to credit problems. If that’s the case and you’re on a good deal at the moment, you may choose to stay with your current lender.
Similarly if you have very little equity, you might stay where you are, and if you’re already on a great rate you probably won’t want to leave it.
What remortgage options are available?
The most common options when you remortgage are to go onto a two, three or five year fixed term. Our recommendations will depend on your circumstances. We would just have a chat with you on the phone and discuss your situation.
If you were looking to move in the next three years it would be pointless having a five year fixed term. But if you’re in your forever home, a five year fixed deal would take advantage of lower rates at the moment. There are also 10 year deals, but these aren’t so popular as it’s a long term commitment. These come with a hefty early repayment charge, so if your circumstances were to change and you may find that it’s costly to leave your mortgage deal.
Speak To An Expert
What we really enjoy is being part of one of the most important purchases in people’s lives. It is incredibly special to witness the excitement and emotion when people receive their mortgage offer.
Whether it’s your first time, moving home, investing or just looking for a better rate we would love to hear from you.
Why remortgage at the end of a fixed rate deal? What happens if I don’t?
We’re asked this all the time! The important thing is that your lender actually banks on the fact that you won’t get round to remortgaging. A certain percentage of people will do nothing and will then fall into what’s called the lender’s ‘standard variable rate’. This tends to be significantly higher than a typical fixed rate.
This way they earn more money. But the great news is we can normally get you a remortgage with no arrangement fees or valuation fees, and most of the time you can get cashback to pay for your legals as well. So the entire process is a lot cheaper and smoother than when you first bought your property.
How do I improve my chances of getting a good remortgage?
This is an important question. We’ve had people that want to remortgage and then a month before they’ve gone out and bought an expensive new car which meant they were unable to do what they wanted to do with their mortgage.
The main tip to get a good remortgage is to keep your credit report clean, it’s worth checking Check My File who compares your credit report across all the major credit reporting agencies. Don’t miss any payments on your credit cards, store cards or any loans, especially within the three to six months of the remortgage. Don’t take out any new finance agreements just before either, and don’t gamble excessively.
Are there any fees associated with a remortgage?
We will always compare what we can get you with a new lender against staying with your current lender. We don’t want to take you through a process which might cost you money in fees unless it will be worth it in the longer term.
In some situations you will be better off staying with your existing lender for a new mortgage, which is called a product transfer. This is a fast and simple process. We’ve already done the research, and if a new deal with your existing provider is the best option we can just do the product transfer for you. There’s no broking fee for this as it’s something you can arrange yourself – we just make it simpler for you.
How can Richard Crow Mortgages help with remortgaging?
If you’re unsure of what to do and the process, just get in touch. A phone consultation will take just fifteen minutes – we will review your personal situation and see very quickly from our sourcing systems whether there is a better deal available for you. If we can save you money, then it’s a no-brainer.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.