Firstly, what is it? Remortgaging means switching your mortgage from your current lender to a new one....
If you’ve ever haggled for better gas or electricity bills, then this is sort of the same process, and this is the most common reason why some homeowners Remortgage to cut the cost of their mortgage.
With lower interest rates, switching or moving to a new mortgage can save you thousands of pounds over the life of your mortgage. So, it is definitely something you could be thinking about while stuck in Lockdown. You can also Remortgage to fix your mortgage costs for a few years or to take money out of your house.
Don’t worry though, Stephen Kerrigan, a mortgage advisor in Doncaster can help explain the pros and cons of remortgaging, find you a good remortgaging deal, and also take care of the technicalities and paperwork for you.
Yes, and the fees will be similar to those you paid when you started your current mortgage. The areas that you will need a fee for are the following: Arrangement fee to join a new lender, exit fee to leave your current lender, survey and legal fees, early repayment charge – which gives you a penalty for leaving a mortgage deal before the end of the agreed period.
The equity in your house is the difference between the value of your home, and the size of your mortgage. However, if your property is worth £200,000 and you have a £150,000 mortgage, your equity is £50,000 or 25%. But when you buy your first home, you might be able to afford only a 5% deposit which means you gave 5% equity in your home.
This is the loan-to-value ratio, where you only have 5% equity is a high LTV and you will be charged a higher mortgage rate. However, anyone who can put down a 25% deposit, a moderate LTV, will have a much better choice of competitive mortgage rate.
So, it might also be worth waiting to Remortgage until you have built up more equity in your home for the advantage of lower interest rates. Our advisers can help you with the sums.
Mortgages fall into two broad categories, such as a ‘Fixed Rate’ and a ‘Variable Rate’. The interest rate you pay depends on the type of mortgage you choose.
Fixed rate mortgages have a set interest rate and last for a fixed period of time – typically 2, 3 or even 5 years. Some allow you to fix for longer, perhaps 10 years. You are tied in for this length of time and will have to pay an early repayment charge if you come out earlier.
As the name suggests, the interest charged on variable rate Remortgages goes up and down as the interest rates change. You’ll not only know for certain how much your mortgage will cost in the coming years, but at least to start with, it should cost less than a fixed rate loan.
If you’re stuck, and want to know how you can Remortgage your home. You can phone Stephen Kerrigan, and one of our advisers are happy to answer any questions you have, explain how remortgaging works and talk you through the various options. Thankfully, there is no charge for our service. We’re a Fee Free Mortgage Advisor in Doncaster.