Why Do I Need to Remortgage?

Important to know

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. You may have to pay an early repayment charge to your existing lender when you remortgage.

Are you considering remortgaging your home? There are many potential motivations for such a decision, like gaining better financial stability or entering into a new stage of life. Perhaps you’ve been lucky enough to secure higher paying employment or have found yourself in the situation of merging households with someone else – either way, finding a suitable mortgage deal is likely an important step towards achieving these goals.

With a mortgage from a new lender, you could benefit from greater flexibility and have the potential to shorten your term or even save money each month. To ensure this is the best deal for you, be sure to do your research thoroughly.

Please remember that a mortgage is a loan secured against your home. Your home may be repossessed if you do not maintain repayments on your mortgage or any other load secured against it. You may have to pay an early repayment charge to your existing lender when you remortgage.

Reasons that you might need to get remortgage

Here are some reasons to consider:

  • When your present agreement closes, you may want to consider switching lenders in order to take advantage of any introductory discounts or rates available. Furthermore, if your income has been reduced it might be preferable for you to lower the amount of money repaid each month instead. Changing over and elongating the mortgage term should allow this option.
  • If budget allows, consider shortening your mortgage term and paying more each month. Switching lenders might be an effective way to achieve this goal.
  • If your current mortgage deal has expired and you’re now paying a Standard Variable Rate (SVR), it’s likely to be expensive. To pay less in repayments, consider transferring over to either a fixed-rate or variable rate plan instead.
  • Want to decrease your mortgage term? Consider making bigger payments each month or switch lenders and find a more accommodating one that gives you the option of a “mortgage holiday.” If your current lender doesn’t give you this opportunity, perhaps another provider will.
  • If your home’s worth has drastically increased since you acquired the mortgage, then your loan-to-value ratio will have also climbed. Consequently, you may be offered a more favorable rate. If you currently possess a mortgage, then it is possible to switch over to another product with better conditions and terms.

Things to take as considerations

Before making any decisions regarding remortgaging, you’ll want to consider the following:

  • When deciding whether or not to remortgage, it’s important to keep an eye on the Bank of England’s interest rate. If rates have dropped, you may want to wait; however, if they’ve gone up, now could be the perfect time to secure a new fixed rate deal.
  • If you’re considering remortgaging your home, be aware that you may have to pay an early repayment charge if you decide to switch lenders before the end of your current agreement. This penalty could override any potential savings from a new lender and should definitely be taken into account when weighing up whether or not to move. Make sure to factor in all costs associated with switching mortgages so that you can make the best decision for your finances.
  • To remortgage, you must factor in the cost of conveyancing fees and a survey of your property. Both can be pricey propositions, so it may be worth considering if staying with your current provider is more economical.

When to start searching for your remortgage

It’s wise to start searching for a new mortgage deal three months before your current fixed term agreement comes to an end. This way, you can insure that you have enough time to go through with the entire application process. After your first mortgage term has expired, it will then switch over to the lender’s baseline variable rate (SVR), which is usually higher than what you’re accustomed to paying on a monthly basis. By remortgaging now, however, you could benefit from another introductory offer and significantly reduce interest payments in the long run.

We hope this remortgage guide has helped you understand why remortgaging can be beneficial for you, and how to go about it. If you need more advice or assistance, please contact us at Your Mortgage Experts. Your Mortgage Experts have the knowledge and experience to help and guide you, and advice on the most suitable available options.

Call us today on 02081541111 or drop us an email to hello@yourmortgageexperts.co.uk

Your Mortgage Experts, London, W9 2HQ

Luca Bertolino

Mortgage Expert

Your Mortgage Experts is led by Luca Bertolino with 20 years experience in financial services and in the property market. Through Luca’s wealth of knowledge and expertise, Your Mortgage Experts have become a trusted adviser that clients have come to rely upon for all their mortgage and protection needs.

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