REMORTGAGE

REMORTGAGING GUIDE

Until the mortgage on a property is paid off everyone will need to remortgage at some point, if not many times. The initial mortgage and its terms & conditions and interest rate aren’t for life unfortunately. That means at the end of your current deal you can move to a different or better deal. It’s here where our experienced mortgage advisors work with you every step of the way to remind you in advance that your deal is soon to expire, and provide clear and tailored advice on what is best for you and your current circumstances. In this section:

• How does remortgaging work?
• What happens at the end of your fixed mortgage term?
• When is best to remortgage?
• How does the remortgage process work?
• What happens if my mortgage is moving to a different lender? 
• Are there specific properties I cannot remortgage?  
• Are there any fees involved with remortgaging?  
• Do I need to arrange a solicitor or conveyancer for a Remortgage?  
• Should I consolidate my debts? 
• How much equity do I need in my property?    
• Will my credit history play a part? 
• What type of mortgages are available as a remortgage?

How does remortgaging work?

Remortgaging basically means moving your existing mortgage from one lender to another. You’d usually look to remortgage if your fixed mortgage term is due to end (your fixed term is usually either 2 or 5 years) and you’re not looking to move house. You may even be able to find a better deal – speak to your mortgage broker to see if remortgaging is the best option for you.

What happens at the end of your fixed mortgage term?

Whether you’ve fixed your mortgage rates for 2 years or 5, it’s important to remember when exactly your fixed term is due to end. When your initial fixed rate expires, unless you’ve made other arrangements, you’re automatically switched on to the standard variable rate (SVR) of your mortgage lender, which can cost you more per month – by quite a margin, potentially. If you’re not planning on moving home, remortgaging could be your best option. A good place to start is having a mortgage review. This will establish whether a more cost-effective mortgage is available; a specialist broker like Roots Mortgages will take in to account your circumstances as a contractor. We’ll be able to look at other deals from your current lender, as well as deals from a comprehensive range of other options on the market. The review will also show if you already have the most suitable deal available.

When is best to remortgage?

To ensure you have plenty of time to look at the market, and secure the best rate, we’d always suggest around 4 months before your current rate ends. This gives you time to shop around without pressure and research your options.  If you’re an existing client of Roots Mortgages, we’ll automatically contact you in advance of your fixed term is due to end.

How does the remortgage process work?

We start by taking details of your personal situation and mortgage requirements, which will help us find the best mortgage for you. We’d then discuss our recommendation and gather the documents the lender will need for processing. Once we’ve double checked everything, we’ll submit the application and follow it through to the mortgage offer stage. If you’re staying with your current lender, they’ll take over and apply the new rate and payment automatically from a fixed date.

What happens if my mortgage is moving to a different lender?

If you’re moving to a new lender, the process above would be followed, but with a little more legal work. After the mortgage offer has been issued, the solicitor will take over and work with you, your current, and your new mortgage providers to make sure your new mortgage starts on the right day.

Are there specific properties I cannot remortgage?  

As long as a property is liveable, there’ll be lenders out there who will consider a remortgage.

Are there any fees involved with remortgaging?   

Yes. Whilst we would love to work for free – that’s not a sustainable business model. Typically we charge a fee of £500. In all cases we would always analyse the interest rate and fee to make sure you’re not subjected to any unnecessary expenditure.

Do I need to arrange a solicitor or conveyancer for a Remortgage? 

Not if you’re staying with your current lender. If you are transferring to a new lender, however, then a solicitor will need to be involved. You’re welcome to find and hire your own, or you can opt for a lender who offers ‘free legals’, which is where the lender appoints the solicitor and covers the cost of the legal work for the remortgage.

Should I consolidate my debts?

This is something we can advise on, taking into account your individual situation, and work out whether it’s cost effective and the best thing to do for you.

How much equity do I need in my property?   

Many lenders will allow you to release up to 90% of the value of your home as part of a remortgage.  As with any mortgage, the more equity you have, the lower the rate, but we’d work with you to tailor it to your own personal situation.

Will my credit history play a part?

As with any mortgage, credit history does impact on the mortgages on offer.  Due to our relationships with lenders, we can consider many situations that other mortgage providers don’t have access to and lets us strike the right balance of understanding mortgage lender and interest rate.

What type of mortgages are available as a remortgage?

All types of mortgage are available, including fixed, tracker, and offset mortgages. We’d discuss your individual situation and recommend the best option for your unique circumstances.