People may have different reasons for remortgaging, but the bottom line is that you are moving your current mortgage product, whether that be with your current provider, or moving to a different lender entirely.
Reasons can include finding a better deal, borrowing money against your home, or simply coming to the end of the initial deal. In this instance, let’s focus on the latter and look at what happens when you come to the end of your deal.
When you come to the end of your mortgage deal you usually move onto the lenders Standard Variable Rate (SVR). This rate is not always the best and may be considerably higher than what you were previously on. Realising this often spurs on many to look to at other products and see what else is available. During the search this time, you may have more equity in your property due to overpayments as well as a change in the value of the house. With this in mind, you may drop down a LTV bracket (Loan to Value) which often opens up a variety of more competitive deals, compared to those in a higher LTV bracket.
It’s always best to start with asking your current lender what deals are available before looking elsewhere. Remortgaging always takes planning and so many people start to look at this a few months before their current deal comes to an end. In some cases, especially if moving lender, you may need to appoint a solicitor and also have a valuation done on your home. Bear in mind, that as much as the value of your house may have increased, it can also decrease. This needs to be taken into consideration when scouring the market for alternative deals. Some mortgages come with an Early Repayment Charge which comes into effect if you are leaving your mortgage before the end of the deal term. This may not always be favorable if your new deal isn’t as competitive. Also look out for exit fees which can range between £0-£250. This will have been outline on your Illustration when taking on the initial mortgage.
At Hanley Economic, we aim to look after our existing mortgage customers fairly and transparently at all times. We will :
- Write to you approximately 6 weeks before your current mortgage deal expires
- Offer you a range of fee-free mortgage products that are available to you subject to your current loan to value and payment history
- Not insist upon a new valuation unless you ask us to do so
- Provide you with mortgage advice at the time of changing your product if you require it
We also have a dedicated Retentions Team who will look after your needs and guide you through the process.
Call us now on 01782 255000 and book an appointment for your free mortgage advice.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
The mortgage market is fast moving and our blog posts can often become outdated, please seek expert advice when looking to remortgage.