If your current mortgage deal is about to end then it’s definitely worth checking the latest offers to see if you can move onto a better rate.
If your property has increased in value, this could open up a wider range of deals, and a lower LTV could mean that you have access to lower rates of interest. But remortgaging isn’t always just about the savings – changes in your life may mean that your current mortgage no longer suits your needs so shopping around for a new product could help you to find something that’s a better fit for your needs, both now and in the future.
But how can you ensure that you get the remortgage deal that you want?
Getting ready to remortgage
The remortgaging process can take a few weeks once you’ve applied. However before you even get to this stage it’s worth thinking about all the things you need to do to make sure that your application goes as smoothly as possible.
Work out what you want from your remortgage deal
Do you want to cut down on the amount you pay every month? Do you just want the flexibility to make overpayments and pay off your debt sooner? Would you be happier with a fixed rate so you know exactly what your repayments will be each month? With typical mortgage deals lasting for 1-5 years, try to think ahead and how your plans may change in the future.
Will there be any charges to leave your current deal?
If you’re still under the terms of a fixed term deal then you may have to pay a penalty charge when you remortgage, known as an exit fee or an early redemption charge. This is often a percentage of your current mortgage so it could be thousands of pounds. Unless you can make significant savings on your new deal, then it may be worth waiting until the end of your mortgage term before you remortgage.
How is your credit score?
Just because you’ve had a mortgage previously doesn’t mean you’re guaranteed to get one the second time around, so you’ll want to do all you can to make your application a successful one. Go back to basics just like you did as a first-time buyer and check your credit rating – things may have changed since you first applied so it’s always good to know where you stand. If there are any details on your credit score that are wrong, then you can apply to have these amended.
Finding a remortgage deal
There are hundreds of remortgage products available so it’s wise to shop around to make sure you are getting the best deal.
It may be useful to speak to a qualified mortgage adviser who can do all this legwork on your behalf. Mortgage brokers often have access to exclusive deals that aren’t available on the high street so by doing it on your own, you may be missing out on deals that you never even knew about.
Once you’ve found a suitable deal, the lender may offer you an agreement in principle – whilst this isn’t a guarantee of approval for a remortgage, it can help you to understand all the options.
Have your finances in place
Whilst moving to a new remortgage deal could save you money, there are still costs that you’ll need to consider.
This is a charge set by your mortgage lender, also known as an product fee or arrangement fee.
If you’re moving to a new lender, you’ll need to arrange a valuation to confirm the value of your property.
You’ll need to liaise with your solicitor to arrange the transfer of your mortgage to a different lender.
Before moving your mortgage, you should calculate all these costs to make sure that it’s financially worth it after all the costs have been covered.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.