Remortgage Guide – Mortgage Experts Online
Remortgage Guide – Mortgage Experts Online
There has never been a better time to look at remortgaging your property.
If you are looking to swap lenders for a better rate or looking to release some equity from your property, then we will run through the options available to you. We will cover all the major point and try and answer as many questions as possible.
Best advice is to get a copy of your latest credit report, you can do so by clicking here.
The mortgage experts we work with will provide you with unbiased advice on whether remortgaging is the best option for you and your current circumstances.
What are the benefits of remortgaging?
There are many different benefits for remortgaging. When remortgaging your property to secure a better rate than your current deal, this will save you money each month (if keeping the same mortgage term) and you could also look to reduce your term and also pay less a month. In the longer term this is going to save you potentially thousands in interest payments.
When I can remortgage?
You can remortgage from one lender to another at any time. The financial implications of doing so might make it an expensive option, as most mortgages have some form of early repayment penalties attached. You may decide that even with the charges the remortgage is still a good option.
Can I remortgage with early repayment charges?
Early repayment charges (ERC) are often a percentage of the balance at the time.
A 2% ERC on a £100,000 mortgage balance would incur £2,000 in early repayment charges.
Usually the ERC is for the duration of the mortgage deal. i.e. 2-year fixed rate has a 2-year ERC tie in. However long your tie in period, if you repay the mortgage in this time you will have to pay the ERC. If you’re unsure what the ERC is then your mortgage lender will be able to tell you.
As well as taking into consideration any ERCs you will need to factor in:
- Valuation fee – if applicable
- Lender arrangement fee
- Broker fees
- Legal fees
In an ideal situation you would remortgage when your current fixed rate comes to an end and switich to a new rate or a new lender. If your mortgage deal ends, then you will automatically go onto the lenders standard variable rate (SVR).
Examples of why you might need to remortgage within the early repayment period.
- Splitting from partner – need to raise capital to buy them out
- Debt consolidation
- Tax bill
- Money to invest in your business
Your mortgage expert will look at all of the options available including secured loan options, and give you a comparison and clarification on which is the best option for your circumstances.
How do I remortgage?
The process is a simple one, your mortgage broker will.
- Look at the loan-to-value (LTV)
- Credit profile
- Discuss mortgage required
- Search the whole of the market for the best deal.
Below is an example of the maximum loan to values available for the most common types of remortgage.
|Remortgage Reason||High Street Lenders||Specialist Lenders|
What are the costs of remortgaging?
They can be extremely low as mortgage lenders will be competing for your business. If you have a clean credit profile and using a high street lender, most lenders will offer products with the following benefits;
- Free valuations
- No lender arrangements fee
- Basis legal work free – Anything extra is chargeable, such as transfer of equity
A fee free remortgage is not always the best option, as these products tend to have slightly higher interest rates than products with arrangement fees etc – if you have a higher mortgage balance it could be preferential to select a product with fees – our mortgage experts compare all mortgage deals to ensure you are with the best lender for your circumstances, and on the best product the lender offers.
When using a specialist lender there will tend to charge for the above and not include free legal work.Because there is less work involved in a remortgage any broker fees tend to be lower.
Can I get a 95% remortgage?
Yes, it is possible, but the options are very limited. If it’s a pound for pound remortgage (ie with no additional borrowing) then there will be options available, with some lenders also having specific products designed for Help Buy remortgages to clear the HTB loan. These products allow up to 95% loan-to-value if fully paying off the government loan. The same criteria will apply such as affordability and credit profile – at 95% credit profile would need to be excellent.
Can I remortgage a buy to let property?
Remortgaging a buy to let property works slightly different. The monthly rent received will play a major part in how much the mortgage lenders will lend. Some lenders would consider your income if the rental received isn’t enough, this is call top slicing.
Maximum loan to value available for a buy to let property is currently 85% (24th March 2020) there are only a handful of lenders in this area. For the best rates you would ideally be looking at 75% loan to value but there are options at 80%.
I own a house with no mortgage can I still remortgage?
Yes. This is known as having a property which is unencumbered. If you’re mortgage free then the same options will be available to you, assuming you meet lender affordability and other criteria.
Some lenders will differ in how they look at you, some will offer the same products as a new purchase and the same criteria will apply, this will normally incur legal fees. The majority of lenders will class this as a remortgage and offer their mortgage products on this basis.
Can I remortgage a Help to Buy property?
These type of remortgages need extra care when looking to replace. The mortgage provider will need to have a product available for the help to buy scheme. Because the interest on the equity loan starts after 5 years, this is when people will look to remortgage to try and clear all or part of the loan.
The mortgage experts we work with will be able to advise on the best product for your circumstances.
Can I remortgage with bad credit?
Yes, remortgaging with bad credit is possible. You may not have bad credit but may have a low credit score, there is a difference.
Bad credit remortgages are possible and will depend on the what the credit issues were, how recent they were, and whether they have since been resolved. Depending on your mortgage provider, it may be a better option to keep with your current provider and look at secured loan options if wanting to raise additional funds.
Can I remortgage to pay off debts?
Yes, this is called remortgage for debt consolidation. This can benefit people who have unsecured debts such as credit cards that they are paying each money, but the balance is reducing slowly (if at all). Also, we often see people have started some home improvements and put the expenses onto credit cards or personal loans and want to pay them off.
You should always think carefully before securing previously unsecured debts against your home.
How long does a remortgage take?
If it’s a straightforward remortgage it should take no longer than 6 weeks. Often there are other factors such as transfer of equity, then this can take longer due to an applicant needing independent legal advice. When you are using your own solicitors for a remortgage the process can be done in 3-4 weeks.
Can I product transfer?
A product transfer is the process of changing rates and product with your current mortgage provider, and they will generally allow you to do this 3 months before your current product expires. The benefits to staying with your current provider is the simple process, if you aren’t changing term or loan amount then there isn’t an additional underwriting. More lenders have started to offer this service, however there are some specialist lenders who don’t.
The mortgage experts we work with will be able to look at your situation and give you the best advice for your circumstance.
Best remortgage fixed rate deals
Our mortgage experts will look at every case on an individual basis taking into consideration every factor, from credit profile to affordability. They will look at your current situation and importantly what your future plans are. They will discuss the options available
- 2-year fixed remortgage rate
- 3-year fixed remortgage rate
- 5-year fixed remortgage rate
- 10-year fixed remortgage rate
Remortgage rates are constantly changing, to secure the deal for you contact us now.
Speak to an expert remortgage advisor.
We will put you in touch with a dedicated mortgage expert who will offer you whole of market unbiased advice specific to your circumstances.