Getting Ready to Remortgage - Everything You Need to Know
22 August 2022
ESPC independent mortgage adviser, Paul DeMarco, has given us his insight into what homeowners should consider when remortgaging a property.
If your current deal is ending and you want to find out if you can save money by switching mortgage lenders then remortgaging could be a great option for you. Remortgaging is when a homeowner moves their mortgage to a new lender or switches to a different deal offered by their current lender. This is also commonly known as a product transfer with the existing lender.
Deciding what type of mortgage is most suitable for you often means reanalysing your options. Most lenders are happy to offer existing clients a new competitive rate at the end of a fixed rate period as they are usually keen to retain their clients’ business. Although, it may suit some borrowers to revert to a standard rate with no tie-ins, for instance, if you are thinking about moving house soon or perhaps aren’t sure of your shorter-term plans. Sticking to a variable rate allows for greater flexibility as there are often no early repayments charges involved if you switch lender or pay off your mortgage in full – but keep in mind, some lenders may charge a small mortgage exit fee.
How should property owners begin the remortgaging process?
First of all, your new mortgage provider will need to know how much your property is worth by carrying out a valuation. Then, you will need to look at your last mortgage statement and work out how much you have left to pay on your current mortgage. It’s possible you will have to pay an early repayment charge if you leave your current mortgage so check your paperwork and contact your mortgage adviser if you’re unsure. However, remortgaging is usually done just prior to a clients fixed rate coming to the end of the fixed rate deal.
If you are remortgaging your property without moving house then you should consider the alternative deals that are available to you. Always check with your existing lender as to what they can offer you, this will give you a starting point to make comparisons against.