So you love where you live, your house, your area, or your portfolio of buy-to-let properties, but you could do with a little financial health boost and you really don’t want to move house or sell any of your buy-to-lets? Then, a remortgage could well be your next best move.
What is a remortgage?
This is when you choose to go for a different mortgage deal from the one you’ve already got. Be aware of the costs involved in remortgaging to a new deal. Especially if you leave your current mortgage before your current deal has ended. However, that said, with interest rates on the rise, it might still be worth your while moving sooner rather than later, despite the early charges incurred. You can start the ball rolling 6-8 months ahead and lock in a more preferable rate for when you’re ready!
Why would I remortgage?
You might be finding times a little tricky, so a remortgage is an excellent way of being able to consolidate other debts, pay for a wedding, buy a new car, renovate the kitchen or general home improvements. The possibilities are endless. Remortgaging with Manchester Money can be a little like giving yourself a financial makeover, a financial health boost as it were.
After your deal (usually three to five years) has ended, you’ll move onto the SVR – the standard variable rate, which is generally higher. So if you need to be sure that you know what your monthly outgoing will be, it’s wise to remortgage to another fixed term.
Why choose Manchester Money to help with a remortgage?
As independent mortgage brokers, we have access to the whole of market, so are in the perfect position to find you a better, more favourable deal. We’re not biased towards any particular lender, so you can be assured that we have your best interests at heart – and not those of the lender.
What benefits are there to a remortgage?
Remortgaging is also a great way of lowering your monthly payments. But, be aware that it does mean that your new term will probably be a longer one, so whilst you’re enjoying your lower payments and home improvements, you’re actually taking longer to pay them off, which also means you’ll be paying more for your debt in total.
How do I remortgage?
Here at Manchester Money, we make this process as straightforward as possible. It’s a similar process to applying for a mortgage.
It’s worth doing a little homework and making yourself aware of how much your home is worth, how much you have left on your current mortgage, when your mortgage is due to be completely paid off, and what type of mortgage you’d like to switch to, etc.
You’ll also need a Conveyancing Solicitor when remortgaging.
Should I remortgage using my current lender?
If you do choose to use your current lender, it’s called a product transfer and can be quicker than changing lenders. But, at Manchester Money, we have access to the whole of market, so you’ve nothing to lose by checking in with us to see if we can find you a better deal than your current lender.
How soon can I remortgage?
As mentioned earlier, you can start the remortgage process 6-8 months ahead of your current deal expiring. But, it is always good to check any potential exit charges should you exit before its natural end.
Make sure you account for said charges when working out how much you could save when considering remortgaging.
Are there other costs involved when remortgaging?
As with any other mortgage, there are a standard set of fees you can expect to pay, such as:
- Arrangement fees – usually in the region of £1000
- Booking fees – around £100 and £200 (at time of writing/2022/Money Supermarket)
- Valuation fee – you might be lucky to find a lender who offers a free valuation fee as part of the package, but if not, you’d expect to pay around £300
- Legal fees – again, your lender may cover these, but if not, contact a reputable conveyancing solicitor. We can help; just ask.
Don’t forget, if you’re exiting your deal early, you’ll have an exit fee and potentially an ERC (early redemption fee), which could be thousands depending on the amount of your mortgage.
What if my financial circumstances have changed since I took out my current mortgage?
The same rules apply in that your lender will need to carry out credit checks and financial checks. Clearly, this will have an impact on your remortgages and the amount you can borrow and the sorts of remortgages you can/will be offered.
For example, if a few years have passed since your last mortgage application, you will likely owe less and your home may potentially be worth more. This may therefore mean a cheaper mortgage deal. But, that is dependent on your circumstances and the market at the time of applying.
Another example – if you’ve lost your job or had a family and your outgoings have increased, you may not fit the criteria that a lender requires to remortgage.
Can Manchester Money help with finding me the best remortgage deal?
Absolutely yes, we can. We’re happy to have a chat and look at your circumstances and as we have excellent relationships with our lenders, it’s likely we’ll be able to advise on the best product for you and the likelihood of you being accepted.
The best remortgages deal will depend on many factors. How much do you now earn (in relation to your home). This is known as LTV – loan to value ratio. If you know ahead of time that you’re in the market for a remortgage, be aware of credit card bills, car loans, etc., as these all go against the amount you’re able to borrow. So ensure you have good credit scores and have a steady amount of disposable income.
Can I remortgage with bad credit?
At Manchester Money, we’re used to working with clients with all sorts of backgrounds – self employed, bad credit, etc. If you know you have bad credit, it’s unlikely you’ll get an attractive remortgage deal as lenders need to know that you can make your repayments. But don’t dismay; we have experts in this field, so do get in touch and we will do our best to help.
For anything concerning a remortgage, do not hesitate to give Manchester Money a call and we can start the ball rolling for you.