As the end of your mortgage term approaches you may be weighing up your options and which best suits your situation. Remortgaging is a very common choice for those nearing the end of their mortgage and wanting to save some money, but it should be thought through carefully first so the benefits are not outweighed.
What is remortgaging?
The process of remortgaging involves moving from one mortgage provider to another. You might remortgage if you find a better deal at a cheaper rate or if your personal circumstances change, meaning that you need to re-think your financial commitments.
1. You should think carefully before remortgaging
Like most mortgage processes, it all starts with an appointment with your adviser to go over the options available and how they could impact your future and finances. Remortgaging shouldn’t be considered hastily, if you are unfamiliar with what is involved be sure to cover all areas with your advisor.
2. Remortgaging can reduce your monthly bills
For many of us, our mortgage is the biggest financial commitment we will have. Instead of staying with the same lender, asking a mortgage broker to spend some time looking for better deals on the market can save you money and reduce your monthly costs. It is advisable to ask your broker to start looking at new deals around four to six months before your deal is due to expire.
3. The value of your home could put you in a lower loan-to-value band
Fluctuating property prices can sometimes work in your favour. For example, in the time since you took out your original mortgage you property value could have increased which means you would owe less against the value of the house which could put you in a lower loan-to-value (LTV) band. This means that remortgaging can make you eligible for much lower rates while freeing up a little extra money.
4. You will need to organise the relevant information yourself
Being organised and getting all the information your broker requires together will give you an advantage in your remortgage application. Speak to your adviser first to get an idea of what you might be asked to provide.
This might include the following...
- Proof of your income
- Current mortgage details
- Accurate outgoings
- A forecast of your intentions such as extra borrowing if required
- Monetary exchanges
- Details of structural alterations and planning permissions
- Basic information such as your address and ID
5. Remortgaging isn’t for everyone
Remortgaging comes with pros and cons, so where possible you want to make sure that you are saving money instead of acquiring more bills. Like most mortgages you will come across some costs and fees such as property valuations and other legal fees. You should look at the total costs for your deal term and which lenders can offer the best deal before making any final decisions, which your broker will help you with.
To find out more about how we can help you remortgage your home, head to our services page or give us a call and get tailored advice from one of our experts.