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Before your current mortgage deal comes to an end, it’s vital to start planning to remortgage!
We get it…it’s not the most exciting time in your life! But it is financially prudent to have a thorough review. Ultimately, remortgaging could be the most important financial decision you make!
There can be lots to consider! Is it best to remortgage to a new lender or do a product switch? Is it best to get a new fixed-rate or something flexible? Should you borrow more or pay some money off? Are there ways to reduce the cost, or pay it off quicker? Even how do you take someone off the mortgage?
There are so many things to consider! Which is where independent remortgage advice can help.
There’s a lot to think about, that’s for sure! But don’t worry, we will help you figure it all out.
As Devon’s leading independent mortgage brokers, no matter where you live, we can help. Most of our clients are spread far and wide across the UK. At Barr Financial, one thing we do guarantee (aside from getting you the best mortgage deal) is to look after you and provide exceptional service.
So come and say hi!
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What is a remortgage and why should I do it?
A remortgage is the process of changing your mortgage from one lender to another. You do not have to stick with one lender for ever! Infact it might end up costing you a lot if you do!
There are lots of reasons why you might want to do this and here are just a few:
- There might be much cheaper deals out there in the market place. The mortgage market is a competitive place and is always changing. Don’t ever assume, your lender is the always the best. They might have been in the past, but this doesn’t mean they will contnue to be.
- Your initial mortgage might be a special deal for a set period of time i.e. a 2 year fixed rate over a term of 25 years. Of course the mortgage is for 25 years, but your special fixed rate is only for 2 of those years. So at the end of the two year fixed rate period, you might not like the idea of being on the lenders variable rate, which can change at any time.
- Your mortgage costs might go up after the special deal period if you do nothing and revert to the lenders variable rate. Usually this is the case, but not always.
- You might want to review your options and borrow more money.
- You could change the term of the mortgage and aim to pay it off quicker. Or if money was tight, look to increase the term.
The point is simple, as your mortgage is likely to be your biggest debt you’ll ever have, its really important to always make sure you are always on top of it, reviewing your options, and making sure you’ve always got the best deal.
What is a product transfer and how is this different to a remortgage?
A product transfer is changing the mortgage deal, but keeping the same lender.
A remortgage is changing the mortgage deal and also changing the lender.
When your ciurrent mortgage deal comes to an end, your existing lender may be able to offer you a new mortgage product. For example if you had taken a 2 year fixed rate mortgage out, at the end of the fixed rate period, if you did nothing, you will revert to the lenders variable rate (which can and is usually higher than you are currently paying). However rather than letting this happen, some lenders may offer you a new deal, for example they could then offer you a 3 year fixed rate.
So whereas a remortgage is effectively doing the same thing (getting a better deal) but changing lenders to do so. A product transfer is doing this, but without swapping lenders.
The advantage of a product transfer is, there are no solicitors invloved, becuase you are keeping the same lender. Another benefit is there is no assessment or underwriting, provided you are not changing anything. If you are wanting to borrow more, change the term, bring someone else on the mortgage…anything different. Then the lender wil re-assess just like a new lender would.
In other words the product switch really comes into its own for ease (if ease is important to you) if nothing changes.
The disadbavtages of a product transfer over a remortgage, is quicte simply, there might be a much cheaper mortgage deal out there that could save you thousands of pounds.
So when you are considering your options, its vital to consider both and then see if one is more cost effective over the other.
Why is it a good idea to remortgage?
When you first take out a mortgage, don’t think this is the first and only time you need to do so.
A mortgage will be set for a term of i.e. 25 years and usually it will have a special deal period i.e. fixed for 2 years. In this example you will have a 25 year mortgage, with the benefit of having the security of knowing exactly what you will be paying for 2 years.
At the end of the 2 year fixed rate period, if you do nothing, you will revert to the lenders standard varioable rate (SVR), which can be and is often higher, than the special rate you had.
In addition when your special deal ends, remember it was fixed (in this example), and you probably wanted it fixed for a reason (having the security of knowing what the mortgage will cost, is a common reason for wanting a fixed rate), but when the deal ends, you will no longer have that security. You will be on an interest rate that can change and flucatuate at will.
So not only will the mortgage likely go up, you will also lose the security of knowing exactly what you are paying for the mortgage each month.
Remember when a mortgage is on the lenders standard variable rate (SVR) the lender can change their SVR rate at anytime, regardless of the bank of England base rate. You are in the hands of the lender.
We’re completely independent.
We look at the whole market for you.
We’re best positioned to get you the best mortgage deal. Because we’re independent, we’re not tied to just one lender, ensuring our customers get the best possible deal.
- We assess
- You instruct us
- We research
- We find the best deal for you
Agreement In Principle
- You agree to the deal
- We submit the first stage of your application
- You get an agreement in principle
- We submit the second stage of your application
- We present your application in the best possible manner
- They assess your situation
- We support you throughout the process
- They assess your property
- You receive your mortgage offer
- Technically our job is done but we also like to help
- We liaise with solicitors and estate agents
- We keep you updated
- You achieve your goals