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The Need To Remortgage

Mortgages are products, which can be on a fixed rate or a variable rate. If your fixed rate mortgage is coming to an end, you must ensure you speak to a mortgage broker about remortgaging. DO NOT just leave it to roll over AND do not just take the option offered by your current lender. The mortgage you are currently on may not be the best option for you. Rates and products are always changing and it’s wise to know all your options. Mortgage advisers are experts in knowing mortgage rates, the market and can match that to your situation. Taking the stress away from arranging your own remortgage.

when should you start thinking about a remortgage?

The best time to start organising your remortgage is 6 months before your current product ends. This allows you to grab the best mortgage rates available in good time. If for some reason the rates go down, it gives us plenty of time to re-apply. However, if the rates go up within this time you will have secured your best rate already. This will also give you ample time to get your documents together. Or even solve any questions/issues that may make the process a little longer.

why speak to an adviser for a remortgage?

Every homeowner should speak to a mortgage adviser when they are remortgaging their house. Our mortgage advisers are property experts. They work with a large variety of lenders, so they have no allegiance to any lenders. They are only interested in the best fit for you. Many home owners will miss out on other products, deals, advice on how best to handle the remortgage and the peace of mind that they have chosen the best option. Deals are changing all the time. New products are launched or removed. We are up to date on the current housing market and mortgage options.

what is a remortgage?

Remortgaging is the act of switching your existing mortgage to a new deal, potentially with a different provider. You’re not moving house and the new mortgage is still secured against the same property. There are many reasons why you may need to remortgage including:

  • Your term has come to an end – never leave you product as it is, always contact a mortgage broker to support you with your remortgage.
  • You are paying back your ‘Help to Buy’ loan – the time will come when you will have to pay a high interest on this loan if you do not remortgage in time. You can use the money in your house to pay the 20% loan back. The more your house value increases the 20% loan you must repay will increase inline with this.
  • To raise capital for home improvements – this can be extremely expensive, but will potentially add value to your home. Using some of the equity of your home to make improvements can allow you to raise large funds that you may need to achieve this.
  • Pay off a mortgage earlier – if the interest rates reduced heavily, paying the early repayment charge may work out to be a better option.
  • Consolidate other more expensive short term debts – you have to see this as a fresh start, because ultimately you have taken your short term debt and put it into long term. You still owe the money back in a different way. Don’t repeat the cycle but use this as an opportunity to free yourself of the debt you have paid.
  • Change from an interest only mortgage to a repayment mortgage – once the term has finished on an interest only mortgage you have to pay back the amount that you owe. If you do not have a repayment mortgage strategy, your only option would be to sell the property.

Ultimately, all these reasons have one thing in common – the need for the correct advice when remortgaging.

WHy do you need to get a valuation?

If the property value has increased, the lender will give you a better rate. The valuation is important. The Lender will either instruct a physical valuation in person. Or alternately a desktop valuation (online). The decision will depend on the type of property being valued and the level of deposit being paid. This is to ensure that the lender agrees that the price you are paying for the property is in line with the amount the property is worth. If the Lender does not agree with the price that you have submitted, they will issue a down valuation. This will give you the amount they believe the property to be worth. At this point you must decide whether you take a higher loan to value product or do not proceed with the re mortgage.

how does a remortgage work?

A remortgage application follows the same process as any other mortgage application. You will provide your information and documents, and an advisor will work out your available options. Then there will be a credit check leading to an agreement in principle. When you have decided on your product, we will submit the final information to the chosen lender. Next, the lender will instruct a survey. Your case will be given a number and will be assessed by an underwriter. Once the underwriter is satisfied they will issue a mortgage offer.

Can my mortgage application be refused?

If your mortgage is refused it will come down to either your income, finances or if you are unhappy with the valuation. All lenders are different. They have different criteria to meet and will assess each case individually:

  • The lender may decide part of your income is not suitable for your affordability and refuse to use it towards your mortgage. This is generally when including payments such as overtime or bonus payments. 
  • Your employment contract is not suitable for the lender’s specific criteria
  • If you are self employed, the lender must be satisfied that your business is profitable
  • The lender may take any self employed grants that you have taken.

The lender must be satisfied that you are in good control of your finances. Subsequently, our bank statements provide evidence of how you run your accounts. 

You must disclose all credit agreements. Including loans, credit cards, lease agreements and any ‘buy now pay later’ loans. They will ask questions about any regular outgoings and/or gamble frequently. Your outgoing payments directly affect your affordability, in turn impacting the amount that you are able to borrow. Ultimately, the lender must be satisfied that the mortgage they are providing is affordable. 

a mortgage adviser giving expert advice on remortgaging