02 Jan Remortgages and rate switching
Remortgages and Rate Switching – We do not know what the long term effect of the coronavirus outbreak will be but at present it is possibly causing a squeeze on many personal finances. Reducing unnecessary outgoings is more important than ever.
To help we are attempted to provide some useful information about re-mortgaging and product transfers.
The Frequently Asked Questions about switching your mortgage are answered in plain English to explain exactly what product transfers are, how they differ to remortgages and who can benefit from them.
WHY MIGHT YOU CONSIDER REMORTGAGING?
Whether you should remortgage or not depends on your circumstances and needs. Perhaps you are simply looking to reduce your overall outgoings. In this case a lower rate on your mortgage may help.
Below are some triggers that may provide a reason to consider a remortgage
- You are presently on your mortgage providers standard variable rate (SVR) and want to move onto a fixed rate deal so you can be clear about your future monthly repayments
- You have a mortgage rate deal that is coming to an end during the coming months
- Home Improvements are on your agenda and additional money required
- Perhaps you think your current deal is not competitive
- You have a fear of rate increases and want to secure your deal now
WHAT IS A PRODUCT TRANSFER?
A product transfer is where your current mortgage provider offers you a further deal on expiry of your current rate deal, in effect a replacement mortgage product.
SHOULD I DO A PRODUCT TRANSFER TO GET A BETTER RATE?
With the Bank of England at an all-time low, fixed rate mortgage are close to all-time low levels. Therefore, a product transfer could offer you a better rate.
WHEN IS NOT A GOOD TIME TO RE-MORTGAGE?
You need to consider the cost of re-mortgaging, the timing and do not forget your personal circumstances. It is also a good idea to consider the following:
- early repayment charge on your current mortgage.
- The cost of remortgaging might be outweighed by the cost of exiting from your current deal.
- High Loan to Value. If you have a small amount of equity in your current property, it may be difficult to get a more competitive mortgage deal
WHERE CAN YOU GET A REMORTGAGE FROM?
You can remortgage with a bank, building society or a mortgage broker. Do not forget mortgage broker can offer access to a wide range of new products and mortgage lenders. A broker will also advise you on what is most suited to your current circumstances.
WHAT COSTS ARE INVOLVED IN REMORTGAGING?
Remortgaging costs depend on individual circumstances. But you will need to consider the following:
- Any repayment charges to your existing lender
Any exit fees to your existing lender
- Cost of any fees for new mortgage provider. Fees such as: mortgage valuations, conveyancing
Broker Advice fees, where changed