If you’re the kind of person who likes to shop around to find the best deal, then you should be using the same theory to save money on your mortgage – with our help!
Remortgaging is the process of taking out a mortgage on a property you already own to replace an existing mortgage or to borrow money against your property.
If you’re worried about anything or need some remortgage advice, contact Friends Capital.
Remortgaging means changing your current mortgage.
You can do this in two ways, switching to a different lender or getting a different rate from your current lender.
The main reason people remortgage is to save money or release money from your property by borrowing against it. In some cases, you can do both. Remortgaging isn’t any different to switching your mobile, broadband or energy provider, often a move can mean saving money.
The majority of borrowers remortgage at the end of a deal term. This is to avoid moving onto the typically high standard variable rate (SVR).
SVR mortgages could be mean paying up to £4,000 more per year over switching to a new deal. It’s important to start preparing for a new mortgage a few months before your current deal expires.
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.
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.”
Your credit history needs to be as clean as possible before applying to remortgage. Your credit score will affect your chances of getting the best rates. Lenders like to know you are good with your money and can afford to make the repayments.
If your credit history isn’t spotless, don’t give up. Friends Capital help customers with bad credit every day. There’s bad credit, and there is really bad credit – most people aren’t as bad as they think.
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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