02 Feb Remortgage to save money
Probably the most common reason people remortgage is to save money. Therefore, how much can you expect to spend if you are looking to remortgage and will it be worth all the effort?
Well, it is possible to remortgage for free! Yes, that is right it may well be possible to remortgage to a better interest rate and save money on your monthly mortgage payments for no cost at all.
Looking for a better rate
One option is to contact your existing mortgage provider and look at what they have available. The problem with this can be that while your existing mortgage provider may look like a simple option, quite often you will find the lender’s rate is not as competitive as it might be. Over the term of your mortgage staying with your existing lender could cost you a small fortune!
Remortgage Arrangement Fees
Alost every bank and building society will have charges. The name for what is being charged my vary but a charge is a charge. It is important to work out whether you are better of paying a fee to get a lower rate of interest or not paying a fee and taking a slightly higher rate of interest, our fee free mortgage advisers will work that out for you. Where a fee is charged, lenders will offer to add this to the mortgage, but you will pay interest on it as well as paying the fee itself.
In most cases, when you remortgage the new mortgage lender will want to make sure your property is suitable to lend money against. They will therefore want to carry out a valuation survey on the property. Today, lenders mainly carry out a desktop valuation survey. Some will want to carry out a physical survey and get a surveyor to inspect your property. Some mortgage lenders will charge you for the survey however not all charge and we will discuss this with you.
Remortgage Legal Fees
Whenever you remortgage you will need a conveyancer to transfer your mortgage from one lender to another. Try not to think back to when you bought your property, remortgaging is far simpler. It is even possible to avoid paying legal fees.
Mortgage Early Repayment Charges
It really should not be necessary to pay these fees. Where possible your new mortgage should not start before your existing mortgage rate deal ends.
When you took your current mortgage out you will have received a mortgage offer. Your mortgage offer sets out your interest rate, monthly payment, and the date your fixed or tracker rate ends. If you cannot find your original mortgage offer do not worry, you should also be able to find the date your existing deal ends on the annual statement your lender sends you every year.
Mortgage Exit Fees
This varies from one lender to another. However, a fee of £250 is normal. Although this fee is unavoidable, it is possible to recover this money when you remortgage to save money with a new lender.
Use a mortgage broker!
A mortgage broker will have access to the whole mortgage market. The mortgage broker will have access to a wide range of banks and building societies with thousands of different deals.
Mortgage brokers use online specialist mortgage research tools to search for the perfect remortgage deal for you and your situation. As standard a broker will research for deals with:
• No Arrangement Fees
• No Valuation Fees
• No Legal Fees
• No Booking Fees
• Cash backs to cover the Mortgage Exit Fees
Will a Mortgage Broker charge me a fee?
No, we do not change fees. However, some brokers do charge fees for finding you a mortgage deal.
What else will a Mortgage Broker do for me?
A mortgage adviser or broker will initially search the market to get you the best deal. Once you are happy to proceed, they will submit the application for you and complete most of the paperwork. The mortgage broker will talk to your conveyancer and new lender on a regular basis until the mortgage completes making sure the new mortgage starts. This will be timed perfectly to start after your existing lenders’ early redemption charge has ended. This will help you completely avoid any early repayment charges.
We also recommend The Money Advice Service if you want more detailed information.
Should I add any fees?
This will depend on the size of your mortgage. Lenders normally have two deals. One with an arrangement fee and one without. Deals with arrangement fees are normally on a lower interest rate. This will save you money on your monthly repayments. However, you need to work out if adding is a good idea. For example, if it saves you £10 a month over 2 years you will save £240. If the average arrangement fee is say £999, adding is a bad idea.
Can I borrow more than I owe ?
As well as possibly getting a better interest rate or overall deal, remortgaging can be a perfect time to raise extra money. Nearly all mortgage providers will lend extra money. You might want to carry out home improvement for example, or even consolidate some of your loans and credit cards.
What if I want to move home?
Trickey question. Here's the thing: Each persons' circumstances are different, so we recommend that you bring this up with your mortgage adviser. They can make sure you have a product that you can port on to your next home. A porting option simply allows you to take your rate to your new property, subject to certain criteria.
How long will a remortgage take?
We would expect a remortgage to take about 8 weeks from start to finish. Sometimes It can take longer.
Lots of our clients start their remortgage journey early, as this allows them to get ready in good time. There is no problem getting your remortgage underway up to 5 months before your existing deal ends.