Everything You Need To Know About

Remortgage Deals

Are you considering remortgaging? There are many options available to you when the time comes to remortgage. Our expert mortgage brokers can guide you to the best remortgage deal for you.

by Gavin Burrows
Director of Fifty Nine Financial

As you approach the end of your current mortgage deal, it’s time to consider your options.  Do you simply want to try and save money on your mortgage by finding a better interest rate? Maybe you’d like to borrow some additional cash for something else. There are many things to consider when you remortgage. 

I’m sure you can appreciate that the answer to this will be different for everyone. As we are ‘whole of market’ mortgage brokers,  which means we are not tied to a specific lender. This means whatever you want to do, whatever your situation, our mortgage experts can source the best remortgage deals for you. 

Below you can find more information about remortgaging: 

What is a remortgage deal?

A remortgage is basically moving to a new mortgage deal. Most mortgage products have an incentive period. An example of this might be a 2 year fixed rate. As you come to the end of any existing deal it is time to consider your circumstances and make a plan moving forwards. 

Do I need to remortgage?

There are a number of options available to you when it comes to remortgaging. You don’t have to remortgage. However, it is almost always the right thing to do in one form or another. Even if it is simply taking a new product with your existing lender which is often referred to as a product switch. You may just want to find a better deal to switch to. Or maybe you actually need to borrow some extra money for something else. When you remortgage, this is the time to decide on what you need. 

What can happen if I don't find a new remortgage deal?

As mentioned above, if you choose to not remortgage, the most likely outcome would be that your mortgage payments go up.  This will be due to your interest rate moving onto the mortgage providers variable rate. There may be times when this is still your preference. A typical example of that would be if you do not want to get tied into another deal at that moment in time. However, a lot of the remortgage deals that are available are ‘portable’. This means you can move that mortgage to a new property if you decide to move house. Considering this, there aren’t many situations where you would be financially better off not remortgaging. That said, the choice is still yours to make. 

What benefit is there to remortgaging?

Remortgaging can save you money

When you get a new remortgage deal you can often save money by finding a new mortgage deal with a better interest rate. You can sometimes do this by taking a new product with your existing mortgage provider. However, it is often the case that a better deal is found elsewhere, by moving to a new lender.

You may need to borrow extra cash

It’s very common for people to want to take some additional borrowing when they remortgage. There are many reasons why someone may need to borrow more money when remortgaging. This can be for pretty much any legal reason. Some typical examples could be:

    • Home improvements
    • Paying off other debts
    • Needing a deposit if wanting to purchase a buy to let rental property
    • Requiring money to put towards buying a business (normally only allowed by specialist mortgage lenders) 
    • Once in a lifetime holidays
    • Helping out other family member in need
    • Buying holiday home overseas
    • Pay medical expenses
    • Pay to have the lease extended on a leasehold property
    • Buying land 
    • Paying school fees

When is the right time to discuss my options?

As a general rule of thumb, we would recommend 3 months prior to your existing mortgage deal expiring. However, there are many things that can influence how long the remortgage process takes. Depending on the complexity of the situation, in some cases it may be helpful to reach out to a mortgage expert sooner than that. For most situations, 3 months before the end of the current deal is about right. 

Is the remortgage process simple?

The process of applying for a remortgage should be easier than when you first bought the property. The main point in question is finding the right mortgage deal for your situation. Whether that is a pound-for-pound remortgage deal or additional borrowing. Ultimately, you already own the house. You do not have to wait for anyone else in a chain to be ready as you may have to with a purchase. There are no removal men to book in. It is simply a case of finding a new mortgage product for your new circumstances. It is our role as the mortgage expert to deal with everything and make it all seem so simple for you. Once your mortgage offer is secured, it is a straight forward legal process after that to complete the deal. Once the new mortgage is registered at the land registry you’ll be all set. 

Finding the best new remortgage deal to switch to

When the times comes to find a new mortgage deal, you could try and do it yourself. However, there are many reason why you may opt to use the service of a professional mortgage advisor instead: 

  • Speed – The process is much quicker. How long would it take you to compare every mortgage from the whole of market? 
  • Painless – A good mortgage advisor will take care of everything. All you have to do if provide then with the required documents
  • The result – An expert broker will know which lender to go it if your situation is a little complicated. If you do not know the market you can waste so much time and energy on trying to find a mortgage. 

Do I need to switch my mortgage to a new lender?

It is normally possible to get a new deal with your existing lender. This is referred to as a product transfer or product switch. There are a number  of benefits to doing this, including no legal costs, no exit fee, and the process itself is normally very fast. 

There will usually be no requirement for any affordability assessment on a product transfer. Similarly, most lender do not need to run a credit check if you are simply taking a product switch with your existing lender. 

There are other reasons why you may not have the options of moving to a new lender. If you have recently changed to self employed it is one example. Maybe your income has gone down since you took out the existing mortgage. Or perhaps your outgoings have gone up significantly. They are just a few examples of things that could mean taking the mortgage to a new lender is not possible. Whilst your existing lender is unlikely to need any new checks. However, this is not always the case and a lender can ask for updated evidence if they decide it is required. 

Unless you need to borrow extra cash when remortgaging, a product switch is often a good option. That said, there may well be a much better deal out there that can still ave you a lot of money each month. For this reason, it is prudent to compare all of the deals you. Your mortgage advisor will be able to do this for you in a fraction of the time it would take you to do this yourself. 

Why would I switch my mortgage to a new lender?

When you remortgage to a new lender, you have so many more options available to you at that time. Your circumstances may have changed a lot since you took out the existing mortgage. Your credit profile may have improved a lot, you may now have much more equity in the property. These things would mean you could qualify for a much better interest rate for your mortgage. This could mean a large saving in the short term and the long run. 

Additionally, if you are wanting to borrowing extra money, a new lender may be able to offer your the money when your existing lender may not. Mortgage affordability can vary dramatically from one lender to another. So just because one mortgage providers feels it is not affordable, it could still be possible with a different lender.

I don't have a mortgage on my property. Can I still remortgage?

Even if your property is unencumbered, meaning it is mortgage free, you may still find yourself in a position of needing to free up some of the money that is tied up on that property. This is usually a fairly straightforward process as the risk to the lender is often quite low due to the amount of equity in the property. Keep in mind that even with a property that is mortgage free, you will still need to satisfy the lender’s affordability checks. No matter how much equity you have in a property, your income has to support the level of borrowing you want. 

Are there reasons why I shouldn't remortgage to a new deal right now?

As with a lot of things in life, when it comes to remortgaging, timing is everything. If you in the middle of a fixed rate deal, you may find that you have a hefty penalty to exit that current deal early. In this case you should check with your current lender to find out when you can exit your mortgage or what the penalties could be if you were to exit that deal early. 

Also, if you have a particularly small mortgage, it may not make financial sense to switch to a new lender. A lot of lenders have a minimum mortgage amount, which may mean your mortgage is too small for them to consider.

If you are unfortunate to be in negative equity, this would also be a scenario where you would not be able to remortgage, as your current mortgage balance is higher than the value of your property. 

I've had a previous mortgage application declined. What can I do?

If you have previously been declined for a remortgage, don’t panic just yet. There may be many reasons why your application was not successful. The important thing is understanding why it was declined. That way we may be able to find the best way forward to finding you a lender that will accept your application. 

The first step if you have had a mortgage declined previously is speak to a mortgage expert. Explain why you were declined and they will be able to advise on the next steps and hopefully find your the mortgage deal that is right for you. 

At this time you need a broker that fully understands the market fully. Someone that knows which lenders can consider your application. That way you are minimising any impact on your credit rating that could be caused by applying to multiple mortgage lenders at the same time. 

How long will it take to complete a remortgage?

The time scales for completing a remortgage can vary dramatically. It can depend on the purpose of the remortgage and the credit rating of the applicants. Also, simply how busy the mortgage lender is at the time. 

At the time of writing this (December 2020) We have seen a crazy period of time in the housing market. Some mortgage lenders are taking much longer than normal to even give the initial assessment of a new mortgage case. That said, there are many lenders who are still able to get to a mortgage offer within a couple of days. Sometimes even on the same day that we submitted the application!

If it is a more complex mortgage, where the applicants have defaults, CCJs, or other poor credit, this can often make the underwriting process a little longer. 

Making sure that you have all of your documents ready will certainly help to get things moving. Having an expert mortgage advisor handling it all for you should also make the process much smoother. 

Once you have your mortgage offer, the legal process for a remortgage can be done quite quickly. It is not uncommon to complete a remortgage from start to finish in a couple of weeks. However, we would always recommend starting your remortgage process 3 months before the end of any existing deal. 

What do I need to do to apply for a remortgage?

Firstly, we would always recommend speaking to a specialist mortgage broker who can provide you with the right advice and recommendation for your personal circumstances. Your mortgage advisor will be able to find you the best mortgage deal based on what you want to do. A good broker will make the process a streamlined as possible. There are a number of documents that are required when applying for a mortgage. Ideally, it would be helpful to have all of these documents ready in advance. That will help to make the process as smooth and painless as possible.

Do I have any other options if I want to borrow more cash?

Depending on the situation, you may find that a second charge mortgage is more appropriate for you at that time. If the amount you want to borrow is less that £25,000, a personal loan may even be the best option. 

Second Charge 

A second charge mortgage is a loan that is secured against your property, in the same way your main mortgage is. This second charge mortgage is like an extra mortgage on top of your main mortgage. It effectively uses up any equity that you may have in the property. Second charge lenders can be more flexible. It can also be a great option if you are in the middle of an existing fixed rate deal and would be faced with a large penalty for moving to  anew lender. You could take the second charge loan in the interim to get the much needed cash. Then when your mortgage deal is coming to the end of the existing deal, you can look to remortgage and consolidate the the second charge loan into the main mortgage. This could be a much more cost effective way forwards. 

Personal Loan 

Personal loans are typically unsecured, meaning your home is not at risk if you do not keep up the repayments. You may also find that the interest rates are a little higher than a mortgage. However, the biggest issue people sometimes face when considering a personal loan vs a mortgage top up is the term of the additional borrowing. The term of a personal loan will typically be much shorter than what you could get on a mortgage. Of course that means the debt is paid off quicker, but it also means the monthly payment for that extra cash can much higher than if taken on a mortgage. 

It is important to consider all options when you need additional borrowing. 

Speak to a remortgage expert

When the time comes for your remortgage, we can help you. Get in touch and our mortgage experts will be able to have a chat with you and give you the right advice. As we are whole of market this means we are not tied to any mortgage provider and have access to mortgage lenders all over the UK. We can answer any questions you may have and look forward to helping secure you the best new mortgage deal for you. 

Or call 01332 985528 and we will be happy to have a chat about your situation today.

Best remortgage deals from UK lenders

We are whole of market, meaning we are not tied to any lenders. Thanks to this, we can find great deals for all circumstances.

Consolidate Expensive Outgoings

If regular outgoings have gotten out of control, it may be possible to use some equity to pay off other debts if that provides needed relief.

Good or poor credit rating accepted

We are able to help people that may have experienced some credit problems in the past, such as missed payments, defaults or CCJs.

Fast Tracked Phone Appointments

Delivering excellent service is very important to us. As a result, we endeavour to provide our appointments as soon as possible.

As you approach the end of your current mortgage deal it’s time to consider your options.  We are whole of market mortgage advisors, which means that we are not tied to a specific lender. As a result, this means our mortgage experts can source the best UK remortgage deals.

Our mortgage experts can help with:

It is not uncommon that people don’t realise the impact it can have when a fixed rate deal expires and the mortgage moves onto a variable rate. As a result, the monthly mortgage payments could go up significantly. If you haven’t arranged a new deal since your old fixed rate expired and you are currently sat on standard variable rate, there could be a huge savings in interest to be made by remortgaging to a new deal.

Get In Touch if you would like a free quote.