Many of us are looking for a better mortgage deal, or would like to release some of the equity in our home but the process is often not as easy as it first appears.
So what do you need to know before you seriously consider remortgaging?
The first step is to contact us and we can advise you on the best remortgaging options.
We will work with you to check the terms of your existing mortgage. These will tell us if you are tied-in to your mortgage deal or if there are any early redemption charges applicable. You can then decide if it is worth switching to a different rate or stay put until the penalties have expired.
There are broadly four types of deals on offer. To ascertain the option that suits you best, we will talk you through each deal in more detail.
The choice you make is dependent on your attitude towards risk and your perception of which way you think interest rates are likely to go and over what time period.
Fixed Rate Schemes – ideal for people who want certainty and who want to control how much they will be spending each month.
Discounted Rates – offer a reduction off the standard variable rate for a set period. If rates fall, the rate you will pay will go down but if rates rise, so do your repayments.
Tracker Rate Schemes – normally these offers track the Bank of England Base Rate for a set period. If rates fall, the rate you will pay will go down but if rates rise, so do your repayments.
Offset Mortgage Schemes – a type of mortgage that involves combining a mortgage with one or more linked savings accounts. For example, a £250,000 mortgage with a linked £50,000 savings account effectively reduces the remaining mortgage to £200,000 and the appropriate interest accordingly. An alternative might be for the lender to still charge you the same amount of payment each month. In this situation the extra you are paying can only be used to reduce the capital balance of your mortgage. This effectively means that your mortgage will be repaid more quickly as you are paying off capital over a shorter period of time.
Some clients do not want to have any risk with their mortgage repayments and want to regulate how much they will be spending each month. In these situations, these clients are better selecting a fixed rate mortgage.
Other clients may feel that interest rates are unlikely to rise in the near future and wish to benefit from the lower initial payments that a variable rate offers compared to a fixed rate mortgage. These clients need to realise that a discounted or tracker scheme may mean lower repayments now compared to a fixed rate mortgage but if interest rates start to rise, these same clients may subsequently wish they had gone for the fixed rate option.
Selection of an offset mortgage scheme is dependent on the linked deposit or savings accounts. If the amounts in savings or deposits are small then it may not be worthwhile having an offset mortgage compared to other available mortgages.
We will of course guide you through the whole remortgaging process, which includes the following:
Subject to all the paperwork being satisfactory, the lender will issue a mortgage offer which will contain the amount of the mortgage and the terms that they will offer you.
Solicitors will need to be instructed at this point to arrange the legal documentation, leading through to completion of the loan.
The whole process should take about a month to complete, however this may vary from client to client.
Once you have received a completion statement from your solicitor or new lender, the process has finished and your new mortgage is in place.
Bestmortgage4u can offer a wide range of options with access to some of the best deals on the market.
We have access to thousands of mortgage products including exclusive deals with certain lenders. We can select from a wide range of remortgage offers incorporating some special features:
Whatever your mortgage requirements, we are certain we can find the appropriate mortgage for you.
So if you want a better mortgage deal, or would like to release some of the equity in your home, talk to us today.