If you already have a mortgage, and your fixed rate is coming to end, or has expired, then you could be paying more for your mortgage than you really need to – this is where re-mortgaging comes in.
What is re-mortgaging?
It simply means that you have an existing mortgage, but have decided to change your mortgage over to another lender. The new lender provides a new mortgage to you, replacing the mortgage you held for your property with your previous lender.
There are several reasons why someone may decide to re-mortgage:
- You want to make improvements to your home
- You may wish to consolidate other debts into one
- You may have a new addition to the family and need extra cash
You have a deal coming to an end with your current mortgage lender, and your current lender’s SVR (standard variable rate) means that you will end up paying a lot more in monthly payments.
In some cases, re-mortgaging may not be right for you. Some considerations before you embark on re-mortgaging:
Have you only just taken out your mortgage?
Do you have early repayment charges? If so, does the cost of early repayment outweigh the benefits of re-mortgaging?
We are here to help you look at your situation and see what options are available. We can help a customer balance out the benefits of a new mortgage product against their current product. As an independent broker, we can present you with competitive rates – as well as offering affordable arrangement fees. Call us today for some friendly mortgage advice.
If you wanted to re-mortgage early, then there could be early repayment charges (ERCs) due. We will need to assess the impact of the ERCs vs the new mortgage to make sure it makes financial sense to do so.
Re-mortgaging works by moving to a new lender for your existing property. If you have the option of “porting” (moving your mortgage from one property to another), then you could (if it fits in with the lenders’ criteria) be able to move your mortgage onto a new property. If you require additional borrowing to purchase the new property, then its best practice to have a full mortgage review to determine the best course of action.
Journey Mortgages are whole of market mortgage brokers, meaning that we have access to each sector of the mortgage market, able to help many different customers in many different scenarios. If you have bad credit, come and speak to us to find out how we can help you and your family.
Most lenders will allow you to re-mortgage, at the same time, raise additional capital to pay of debt. All lenders have different criteria for this, depending on the situation. Some will allow to raise capital to use for business purposes (business tax bill), some will allow to pay debt (personal). Depending on your situation, we are well suited to advise you on the appropriate course for you.
If you have home improvements planned, re-mortgaging and raising additional capital may be the best course of action, instead of taking personal loans or using credit cards. Most lenders will allow for this. For more extensive renovation projects, lenders may require seeing planning approval (if required) and estimations of the work to be carried out. Journey Mortgages are best suited to advise you depending on your personal circumstances.
Yes you will. As you are re-mortgaging to a new lender, there will be legal work involved from taking your existing lender off the title deeds, to adding the new lender on. Most lenders will offer incentives to customers, by offering this service for free, but it is important to remember that the solicitors in this scenario, work for the new lender, not you as the customer, therefore if you have any queries or if there is additional legal work that needs to be completed, you will be liable to be charged for this. You can of course leave this to Journey Mortgages as we have built up relationships with many solicitors across the country, that offer very attractive rates, and with the cashback incentives that lenders offer, could be enough to pay for the legal work required.
Quite simply, Yes! When your current fixed rate ends, you will move on your lenders standard variable rate (SVR) which will be higher, and is likely to fluctuate in line with the Bank of England’s base rate, therefore, re-mortgaging to a new product/lender, can potentially save you thousands of pounds over the term of your mortgage.