0800 680 0759
8am - 7pm Monday to Friday
Debt Solutions
Remortgage Information
Remortgage FAQs
Moving your mortgage, or remortgaging, is now a very easy process. The UK market has traditionally been very competitive but much of the choice and availability within the system has left in recent months due to the squeeze on credit caused by the world credit crunch. Interest rates have risen across the board and fixed rate deals are coming to an end but thousands of borrowers throughout the UK will continue to pay over the odds for their loan due to misunderstanding over the remortgage process.
- Can I save money by remortgaging?
- How much will it cost me to remortgage?
- Can I use a remortgage to replace other borrowing?
- What problems might I experience?
- What if I just stay with my current lender?
- What type of deals are available?
- What pitfalls should I avoid?
- How does the remortgage process work?
- How long does a remortgage take?
1. Can I save money by remortgaging?
Yes, moving your mortgage from a current lender could save you money. many borrowers pay too much for their mortgage loans because they have allowed their mortgage deal to revert to their lender's standard variable mortgage rate at the end of any preferential period. Knowing when to switch your mortgage to a better deal is one of the most effective ways of saving money.
2. How much will it cost me to remortgage?
This doesn’t have to be an expensive process, and many mortgage lenders now provide specialist remortgaging services but it may be better to trawl the market using an agent who can advice on all products. Some of these charge no fee for legal and arrangement costs.
3. Can I use a remortgage to replace other borrowing?
It is possible to use a remortgage to free up equity stored in your home you can then use this to pay of more expensive borrowing say on credit cards. Moving your mortgage and paying off other debts, could well reduce the amount you pay each month, could let you free up capital. Borrowing on a remortgage could give you cheaper overall borrowing, but remember the loan is secured against your home.
4. What problems might I experience?
A potential problem, beyond affordability, is that the terms and conditions of your existing mortgage loan could mean that you are tied in for a fixed rate of time, and have to pay a redemption penalty in order to change deals early. This type of fee is usually known as an early repayment charge.
5. What if I just stay with my current lender?
You may feel loyalty to your current lender especially if you have recently been a first time buyer, but mortgage lenders usually do not reward customer loyalty. Shopping around for a cheaper loan therefore may be the best way to save money, either through searching the market yourself, using the Internet, or going through a mortgage broker.
6. What type of deals are available?
Four types of deal: fixed, capped, discounted and flexible, are most common. The most suitable mortgage will depend on your individual circumstances.
7. What pitfalls should I avoid?
Avoid lenders who charge extended redemption penalties.
8. How does the remortgage process work?
When it comes to taking out a remortgage, the first step is to get a 'redemption statement' from your mortgage lender. This tells you how much you still owe. You then need to apply to your new lender of choice, with proof of income and identity. At this point, the new lender will value your home and arrange your mortgage, both of which can prove expensive.
9. How long does a remortgage take?
Depending on the specifics, remortgages generally take about a month.
Call us for FREE advice on 0800 680 0759
8am - 7pm Monday to Friday
Or fill out the form below and we will call you back