Some of my valuations are purely for homeowners to have an understanding of their current property price because they are looking to remortgage-
Question is, should you remortgage?
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Many can slash costs by switching mortgage, doing some basic research can save you a lot of money..
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Remortgaging is where you take out a new mortgage on a property you already own – either to replace your existing mortgage, or to borrow money against your property.
Fact- Around a third of all home loans made in the UK are actually remortgages.
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Remortgage tip.
Check if your current deal is about to end.
Many of the best mortgages only last a short time – often two to five years – the typical length of time offered on a fixed rate, tracker or discount mortgage.
When it comes to an end, your lender will put you on its standard variable rate (SVR). It’s likely to be higher than your old interest rate and higher than the best buys available. If so, you want to be ready to remortgage to a cheaper rate. Start looking around 12-14 weeks before your rate ends.
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So you want a better rate?.
If you are tied into an initial deal then you might have to pay an early repayment (redemption penalty) charge which can be huge, sometimes 2-5% of your outstanding loan. Plus, there is usually a small exit fee (it might call it an ‘admin fee’ when you repay any mortgage.
This doesn’t mean you shouldn’t consider switching, the savings can be substantial.
You just need to do your sums before taking the plunge.
If your home’s value has gone up( this is where i come in)
If the value of the property has risen since you took out your mortgage, you may find you’re in a lower loan-to-value band, and therefore eligible for much lower rates. Again, you need to do your sums and I can help with your property value.
You’re worried about interest rates going up?
If it’s the Bank of England base rate that is predicted to go up (currently the rate’s only 0.10% – ridiculously low), this may affect your mortgage payments directly, depending on the type of mortgage you have. If it’s the rates that new customers are being offered, then this doesn’t automatically mean yours will be affected.
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You want to switch from interest-only to repayment mortgage
You shouldn’t actually need to remortgage to do this, your lender should be happy to make the change for you.
You can even change part of the loan to capital repayment and leave some on your interest-only deal, which is particularly useful for anyone with an under-performing endowment mortgage which is expected to result in a shortfall at the end of the term
You want to borrow more??
Perhaps your current lender has said no to lending you extra money or the terms it’s offering aren’t very good. Remortgaging to a new lender might enable you to raise money cheaply on low rates. But remember to take all the fees into account to see if it really is cheaper than other forms of borrowing.
Moving house?
If you’re moving house, it’s not a remortgage you need. But it doesn’t automatically mean you need a new mortgage either. If your current mortgage is portable, you might be able to take it with you.
How to get the best remortgage deal
Chances are that using the right type of broker will be the best bet for most people, as they can whittle down the top deals quickly and offer you an extra layer of protection if things go wrong.
My mortgage team in Shrewsbury would be happy to call you to discuss your options. Please contact me on 01691 674494 or daniel@danieljamesresidential.com
See you soon,
Daniel
01691 674494
