Remortgaging
A remortgage is when you switch from one lender to another in order to secure a new deal on your mortgage product. Evergreen Mortgages can help you to make sure you are always on the best deal for you and your family.
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Is it a good idea?
If you have come to the end of your product or fixed rate, or if your fixed rate or product is ending in the next six months, then now is the right time to be looking at a remortgage. After your initial product, your lender will automatically move your mortgage to the managed or standard variable rate, depending on your original mortgage contract. This new rate is often variable, so can go up or down. Just like an automatic renewal on your car insurance, the standard variable rate is often higher than deals that are available at the current time, even with your current lender. It’s important to look at all your options and not to stay on the standard variable rate.
Why would you get a remortgage?
- A remortgage can help you save money by securing a new product.
- A remortgage can give you security of payment by giving you a new period of fixed monthly repayments.
- You can release money when you remortgage. This can allow you to access some of the equity in your home giving you cash back for renovations or upgrades in your current home.
- Some people choose to release money to clear up existing debt and make the monthly repayments more manageable. However, this should never be done without a fully advised service. Whilst the current monthly payments could be cheaper, any debt added to your mortgage will increase the interest that you pay over the full mortgage term. This could mean paying interest over a much longer period.
Do I need a solicitor?
In most cases, yes. Your mortgage lender registers a charge against your property on the land registry and the deeds of your home. When you change lender, you need a solicitor to do this part of the process for you. Many solicitors offer a very cost-effective remortgage service. Some remortgages come with a free solicitor service or cashback to help cover the costs of your remortgage. If you need a competitive remortgage quote from a solicitor contact us and we can get some figures across to you.
Tips For Remortgaging
You can check this online by looking through your original paperwork or by contacting your lender directly. Some products will be for exactly 5 or 2 years, whereas some have a specific expiry date.
This is the full length of your mortgage deal and not simply the product. Remortgaging is a good time to assess if you would like to keep this number of years the same, extend it or shorten it depending on your budget and requirements. If you do extend the time you’ll be paying your mortgage longer and could end up paying more interest.
This will help you work out the current equity in your home. It is important at the prices that you look at all the sold prices and not the for sale prices, as these are a more reliable indication of how much your property is worth. It is also important to only look at ‘like for like’ properties. For example, a detached three bed is not the same comparison as a three bed semi or terraced, ultimately the lender will request a valuation on the property to check this but it helps to have an idea at the beginning.
Contact us for help with your remortgage and specific circumstances and we can go through all of these points with you step-by-step and how they affect you individually and personally.
FAQs
Sometimes the best deal for a new product could be with your current lender. We can check the product transfer rates available with your current lender, and compare them against a wide range of lenders. This will ensure you are accessing the best deals available to you.
Another reason why a product transfer could be more suitable for you is that product transfers are able to complete in a much shorter timeframe.
In many cases yes. However, there are a couple of reasons why your current lender may not offer you a product transfer. Some lenders just don’t offer product transfers, particularly if you originally needed a specialist lender – this facility may not be available to you. We can help you check this.
Another reason a product transfer may not be available to you is if you are in current mortgage arrears, have missed payments, or have opted to go into some form of arrangement or payment holiday with the lender. These things may not always preclude you from a product transfer, but if there are no options available for you, we can find out the reason for this. This will give you a clear understanding of what you need to do to be able to access a product transfer moving forwards.
Generally a remortgage takes 4 to 8 weeks from start to finish, but this can vary depending on the lender and their service levels at the current time. Remortgages normally have a mortgage offer expiry of 3 to 6 months as lenders feel this is generally ample time for you to complete on your refinance or remortgage. You will also need a solicitor to remortgage. Your choice of solicitor can impact the length of time it takes for your remortgage to complete. We can help you with a recommended solicitor.
There can be fees associated with remortgaging. It’s important that you speak to a mortgage advisor to ensure that you are aware of all fees and are taking these into account when deciding on your new product.
If you are within six months of your current mortgage product ending, then you should contact us now to run through the figures and see what’s available to you. If you secure a rate with a lender now, in most cases, you can still switch to a lower product if the rates were to go down between now, and the time that you complete on your remortgage. However, if rates increase and you have not secured a product, you cannot backdate your application or access those rates after they have been removed (or ‘pulled’ as lenders call it). It is important to check that you have the flexibility to change to a cheaper deal. Not all lenders offer this, but we will check that for you. We will also keep a check on lenders rates moving, so that we can compare the rates against what we have secured for you.
Yes, you can still sell if you remortgage. However if you are planning to sell, you must let your mortgage advisor know. This is because a new product will likely mean new early repayment charges, so they should always be considered and taken into account. Early repayment charges vary from lender to lender and product to product, so we can help you secure a remortgage onto a product with no or minimal ERC’s (or early repayment charges) to make sure you get the best monthly payments now, but it doesn’t hinder your future plans. Some mortgages allow you to ‘port’ your mortgage or move it, to a new property with no early repayment charges. This could be another option for you allowing you to secure a new deal now without waiting for your plans to be finalised.
The amount that you can borrow is subject to lenders affordability calculations at the current time. Your income and outgoings will be assessed as well as your credit score. Contact us for an indication of how much you could borrow and the likely monthly payments. We can give you a tailored estimation for your specific situation.
Yes. When remortgaging to a new lender, a full application and affordability checks are required so it’s important to choose the right lender for your situation. We can help you with this. Contact us to make sure you’re accessing the best available options for yourself.
A remortgage, just like your first mortgage, is a time for you to ask yourselves some questions on your future plans. Your future plans will dictate what type of product you can choose. There are many different types of products available to you not just a two or five year fixed. Make sure when you speak with us, to discuss all those plans so we can guide you in the right direction. Contact us now to guide you through your choices.
You should be able to check your original mortgage offer to see exactly what will happen after your fixed rate ends. Generally you will automatically move onto a standard variable rate with the lender. At this point, any early repayment charge is generally finished, and you are free to move the mortgage to a new lender or to choose a new product depending on your current provider’s options.
