When can I remortgage?
Most mortgages are set to run for tens of years to make them affordable. However, the interest rate they are on is often a special deal for a shorter period. This is typically two to five years. The special rate is likely to have early settlement charges. This would be due if the loan was repaid in part or in full before the end of the special rate period. These charges can be many thousands of pounds. Therefore, before you consider remortgaging you need to understand what it will cost to move from your current lender. And you need to explore other options.
You may be in the minority of borrowers who are paying the lenders standard variable rate or another product where there are no early settlement charges. If so, you would be able to review your mortgage immediately.
Why do I want to remortgage?
People have different reasons for remortgaging> This might be they want to borrow more money. Or they want to change something with their current mortgage. Or, they have had a change of circumstance.
I Want To Borrow More
Raising money against your home can be a suitable reason to raise capital. You must remember that using your home as security for a loan does put your home at risk if you fail to maintain your loan payments so you should think carefully before borrowing against it.
Your mortgage adviser will look at the various ways to raise additional borrowing.
You can have a quick check with this mortgage calculator.
These are a further advance from the existing lender, a secured loan and a remortgage. They will look at the costs of each option, as well as other factors that may influence the appropriateness of their recommendation such as what the money will be used for, the property value, your circumstances (income, commitments, credit history) and even considerations such as speed or simplicity of the process.
I Want To Save Costs
Your lender will usually contact you as far as six months ahead of the end date of your current product. Most lenders will offer you a new special rate to keep you as a customer, however, the rate on offer may not be the best value for you.
A mortgage broker will be able to compare the rates that are available with your current lender and compare those to what is available on the whole of the market. Often your broker will be able to arrange either the product transfer or the remortgage.
You can, of course, change your mortgage product at any time but you need to be aware of the costs of exiting any special rate early, your broker will be able to give you a comparison and explain.
We start the process of reviewing your mortgage around six months ahead if the end date of any current product. This gives you time to update your information and for us to discuss your current circumstances and plans, because we move through life our priorities and needs change. This give us time to line up your new arrangements.
My circumstances have changed
Life events can force our circumstances and plans to change and events like a change of work, separation, birth of child, death of a loved one or wind fall of cash can be a prompt to review our arrangements. A remortgage may not be the solution but are generally a consideration that should be included.
How long does a remortgage take?
Typically a remortgage takes six to eight weeks from application to completion, however, this is only a guide which is why we like to start the conversation six months ahead of the planned end date.
A product transfer is much simplified transaction as it does not usually include the same status checks and valuations that are necessary when you are a new customer to a lender. The lender has already agreed the mortgage and provided it is well conducted and you are not looking to change anything like the term of the mortgage or increase your borrowing they will generally agree a new rate quickly.
Discover how we can help you at www.wearemoney.co.uk and use our mortgage calculator to see how much you could borrow and the costs.