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Re-mortgage advice

Understanding your re-mortgaging options

Understanding your re-mortgaging options

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Re-mortgage Advice: Understanding your re-mortgaging options

Re-mortgaging is the process of taking out a new mortgage on your home and paying off the old one with the new one. This is a great way to access benefits and money-saving options that might be available to you now you have owned your house for a while. 

You may be looking to re-mortgage your house for the security of a new fixed rate for a period, to borrow a bit more, or better mortgage terms and conditions. 

We will take you through the pros and cons of re-mortgaging and provide some advice to help you along the way. For more, in-depth, personalised advice, reach out to The Openwork Partnership today.  

When to Consider Re-Mortgaging: Timing and Market Conditions:

  • Your current mortgage’s fixed term is ending, and you have between 3–6 months left. 
  • Your home value has gone up.
  • You want to see what’s on offer for new borrowers. 

Importance of Timing:

It is very important to time when you decide to re-mortgage. It can take two months to apply for, and be accepted for, a mortgage loan. So it is best to start thinking about this 6–3 months before the end of your fixed term. You want to sign your new deal before your old mortgage provider starts charging you interest based on its Standard Variable Rate. 

There are other timings to consider, such as your home value. Has it gone up since you bought it? If so, you could enjoy better interest rates as you are in a lower loan-high home value band rate. 

Your Re-Mortgage Options: Finding the Best Deals:

With every bank and loan provider also offering re-mortgage deals, the options are varied and can be overwhelming. We can do all the hard work for you. We can even check with your current provider for you, as they may offer a better deal that saves you both time and money.

Re-mortgaging offers many benefits. You can search for one that can help reduce your monthly payments, reduce your interest rate, or help you secure equity for renovating your house. You can re-mortgage with a new type of loan moving from a fixed rate to a variable, or vice versa, depending on your financial goals. You should also check the interest rates against what you can afford and how the current market situation will affect them. 

Before you re-mortgage you should assess your financial situation with a financial adviser, . Applying for a loan will trigger a hard check on your credit score, which could be detrimental if your score is on the lower end. A professional adviser can guide you through the different options and help you understand any complexities of re-mortgaging. Reach out to The Openwork Partnership today and speak to one of our experts. 

What Is The Difference Between Re-Mortgaging and Product Transfer?

Re-mortgaging:

Re-mortgaging pays off your existing mortgage with your new one. You can take out a new mortgage with a different lender to take advantage of better rates than you are on currently or to instead release equity. You can also take out a mortgage that loans you a larger sum of money if you are planning renovations. 

Re-mortgaging allows you to search different deals with different mortgage providers. The costs of re-mortgaging can include legal fees, valuation fees and arrangement fees. 

Product Transfer:

A product transfer is moving your current mortgage product to a new deal with the same lender. This often happens when your fixed rate has come to an end, or you are looking to borrow more money using your house as security. 

With product transfer, you can sometimes take out more than your current/original loan. If you decide to do this, your lender will check you can afford the costs and increased payments. There are several factors that they will look at:

  • Age 
  • Employment Status
  • Income and outgoings 
  • The equity on your current property.

Product transfer is a good option if your circumstances have changed and getting a new mortgage with another lender may be difficult. It can incur fewer costs and the potential of waived fees. This means it could be more cost-effective for you. 

Preparing for a Re-Mortgage: Essential Steps to Take:

Preparing to re-mortgage is like applying for a standard mortgage. First, you need to gather your documents and essential information to be used to assess your mortgage application. Then, you will need to apply for your chosen deal. 

Once you're approved for a new mortgage, your solicitor will facilitate the payment of your existing mortgage with the funds from the new one. This process will incur its own set of fees. You will most likely be charged for property valuation, fund transfer services, and solicitors fees. Make sure to take this into your budgetary considerations.

Conclusion:

If you are preparing to re-mortgage, then you need to prepare the same as you did when you applied for your original mortgage. You should take into consideration any new financial goals, the current market, and the timing of your application. All these aspects can help you to secure the most suitable deal. 

It is also important that you seek out re-mortgaging advice. Working with a financial adviser gives you expert support in the re-mortgaging process. Plus, you can build a more comprehensive overview of your financial goals.

Start your re-mortgaging journey today. Reach out to The Openwork Partnership for a consultation with their financial experts about your mortgage.

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE