Making Remortgages Easier!
When looking to buy a house the first thing you want to start doing is saving money for the deposit and all the other costs.
But the savings shouldn’t stop there.
Once you’ve bought your house there will be lots of expenses, such as bills, ongoing maintenance or unexpected repairs.
Our guide will help you find ways to save money every month so that you’re never out of pocket.
Remortgage your home
You could be spending a lot more than you need by not remortgaging at the end of your fixed mortgage period.
Remortgaging is when you switch from one mortgage to another. Usually this is to get a lower interest rate.
But unfortunately too many homeowners aren’t making the most of what’s on offer.
Around 2 million homeowners are paying their lender’s high-interest standard variable rate (SVR). This happens when you don’t switch to a new deal at the end of a mortgage term.
By shopping around towards the end of your mortgage term, you can potentially save hundreds of pounds on your mortgage payments each month.
What is a remortgage?
A remortgage is when you swap your current mortgage for another one. You can remortgage with your current lender or choose a different one.
You might want to remortgage to:
- get a better rate
- buy another property
- pay off other debts
- make home improvements
How to remortgage
It can take a few weeks to several months to remortgage, depending on your situation.
It’s a good idea to start looking for a new deal about three to six months before you need one.
If you find a good deal, the lender may reserve it for you until your current deal ends.
4 steps to remortgaging
Step 1 – Check for charges
You may have to pay an early repayment charge if you remortgage before the end of your initial period.
This could be up to 5% of your mortgage balance. The percentage is set out in the terms and conditions of your mortgage.
Speak to your lender if you do not know how much you’d have to pay.
It may be best financially to wait until your deal is about to end before you remortgage.
Step 2 – Look at your credit report
If you remortgage with your current lender, they may not check your credit history. This is as long as you’re not borrowing more or making big changes such as changing the mortgage length or type.
Otherwise, a lender will look at your credit report. Your credit report or file is a detailed record of your credit and debt history.
It includes things such as missed debt repayments, and how much credit card and loan debt you may have.
Your credit report helps a lender decide whether to give you a mortgage.
It’s a good idea to look at your credit report before you remortgage. If you apply and the lender turns you down it will affect your credit history. This could make it harder to get a loan in the future.
You can check your credit report for free by contacting a credit reference agency (CRA).
CRAs include:
- Experian
- Equifax
- TransUnion
Step 3 – Find out how much your home is worth at the moment
You’ll get a better mortgage deal the more equity you have in your home.
Equity is the value of your home minus how much you owe on your mortgage.
Your home might have gone up or down in price since you bought it. Ask an estate agent to value your home, or check a house price website like Zoopla.
This will give you a more accurate figure to use when you look for deals.
Step 4 – Get a new mortgage
You can find remortgage deals by:
- asking your current lender
- speaking to a mortgage broker
It can be quicker to remortgage with your current lender, but you could miss out on a better deal elsewhere.
The benefits of brokers
Brokers help you decide what type of mortgage you need, then find the deal that suits you best.
Some brokers work with lots of lenders so they’re able to choose from lots of different deals. At Firco Morgages, we deal with more than 90 lenders.
Brokers are useful if your situation is more complicated. For example if you have bad credit or are self employed.
Few lenders, like First Direct, do not offer mortgages through brokers.
Do you need a solicitor
You do not need a solicitor or a conveyance for the legal side if you remortgage with your current lender.
You will need a solicitor if you move to a different lender.
How much remortgaging costs
Remortgaging can cost anything between nothing and several thousand pounds.
The amount varies depends on things like if you change lenders and what fees they charge.
Before choosing your mortgage, it’s important to know exactly how much it will cost you in the long run.
The true cost of your mortgage is your monthly repayments, plus fees, minus any cashback.
Get a mortgage with Firco Mortgages today
- A top rated online mortgage broker
- Thousands of deals from over 90 lenders
- Straight forward online application process
- No waiting for appointments
- No paperwork
- Free ongoing mortgage monitoring
We don’t tend to publish mortgage rates on our website. In most cases rates are negotiable and based squarely on the individual circumstances of the borrower, their plans, assets and income.
Firco Mortgages is an independent mortgage broker that has strong relationships with the key lenders in the UK mortgage market, including those private banks who do not have a high-street presence. We arrange bespoke mortgage solutions for our clients, providing a tailored one-to-one advisory service, delivered face-to-face or remotely, depending on what suits you.
Please click on ‘Become a Client, Enquire Now’ at the bottom of the page and complete the enquiry form and we will normally contact you within the same working day during business hours or if you would prefer us to contact you outside normal business hours then please advise and we will quite happily do so. Alternatively you can email us with details about your requirements to info@fircogroup.co.uk or call us on 0151 372 0388
The above article is purely for information purposes and does not constitute advice.
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