When you remortgage you are simply taking out a new mortgage on a property you already own – either to replace your existing mortgage, or to borrow money against your current property.
You can remortgage by taking out a new deal with your existing lender or move to a new mortgage with a different lender. If you are not looking to get a new deal, you can remortgage to release equity in your home and receive cash.
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Read our advice article – Should you re-mortgage? – How to earn cash from your home >
The majority of borrowers remortgage at the end of a deal term. This is to avoid moving onto higher standard variable rate (SVR). The SVR from a lender is often much higher, sometimes double the amount of the fixed rate.
It’s important to start preparing for a new mortgage a few months before your current deal expires. We recommend planning for a remortgage 3-6 months prior to the end of your fixed rate mortgage end date.
In some cases, you can switch your mortgage earlier; however, fees may apply. Speak to a mortgage broker, and they can advise you on whether it’s worth changing your mortgage early or not, and tell you how much you can save.
This really depends on whether you’re staying with the same lender or changing. If you are staying with the same lender four to six weeks is typical, for a new lender eight to twelve weeks is more likely.
Friends Capital Tip: “To avoid delays, start looking for a new mortgage in advance – two to three months before your deal expires is ideal.”
While many lenders will not be forthcoming with offers for remortgaging with bad credit, it doesn’t mean you won’t be able to get the loan you need. Bad credit is an issue for banks because bad credit makes you:
Although bad credit does make banks cautious, some financial institutions are willing to look past this. Bad credit history doesn’t always mean you can’t handle remortgage payments. Some lenders are able to consider these problems and still offer remortgaging services.
Independent financial advisors will be able to point you in the right direction. They will know which banks specialise in remortgages for people with bad credit.
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One of our friendly advisors will either call you back within 24 hours (usually the same working day), or will take details from you in order to best deal with your situation.
When you speak with us, we will take a ‘fact find’. At this stage we take basic details about your situation. We will then search the whole of the market and find you the best deal available.
If you are happy with the deal that we offer, we will then contact the lender for you and get you what is called a ‘decision in principal’.
If you’re happy with the decision in principal then we will secure this deal for you and deal with the application for you on your behalf.
No. The equity you have in your property essentially acts as a deposit. Equity is the percentage of the home you own yourself. You can, however, add any additional money you have saved when you remortgage to get a smaller mortgage.
It depends on your circumstances when considering whether it’s better to remortgage or get a personal loan. The equity in your property will be a significant factor and how long you want to borrow the money for. Mortgages tend to be longer-term but aren’t as flexible as personal loans. Get advice from a financial advisor; ultimately, you want to pay as little interest as possible and reduce the risk of additional financial pressures.
If you do a full remortgage, you’ll refinance your entire mortgage either with your existing lender or a new one. A remortgage can be as simple as keeping the same loan size but moving to a new deal, or you can take on extra borrowing, releasing the equity in your home. Don’t forget releasing money when remortgaging is increasing the size of your loan and often the repayment time.
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