What is remortgaging?
Remortgaging is the process of either negotiating a better deal with your existing lender or switching your current mortgage on your home to a different lender. In its simplest form, a remortgage means you are changing from your current contract to a new one to benefit you in one way or another.
Should I remortgage?
It is important to speak to an adviser if you are thinking of remortgaging. At Miles & Barr our expert advisers can inform you on why and when is right to remortgage. There are usually a number of reasons to remortgage, they commonly fall under the following categories; refinancing to a better deal, releasing equity or protecting yourself against rising rates.
Refinancing to a better deal:
This will be dependent on your current contract but there is every possibility that if you choose to refinance your mortgage you could achieve a reduction in your current rate of interest. A remortgage in this instance can reduce your monthly outgoings and in some cases you may see a reduction in the overall figure you’re required to pay back.
Releasing the equity from within your property can provide you with a lump sum to use however you see fit. If you have equity within your property, the value of your property against any monies owed on a mortgage or even if your property is mortgage free, subject to normal mortgage conditions, you can release this and use it for pretty much any purpose you wish. For example: to gift to a relative as a deposit on their first home, to pay for your child’s education, to pay for a family holiday, to buy a new car, to complete home improvements or even to refinance a debt with a higher rate that you hold elsewhere to save yourself money each month.
Protecting yourself against rising rates:
Interest rates have been at a record low for nearly the last ten years, so a lot of mortgage customers have taken advantage of this by remaining on a variable rate mortgage (a tracker tracking the Bank of England base rate or their mortgage lenders standard variable rate). However the rates can change at any time and without any real notice – in the late 70’s the Bank of England rate was 17%. To protect yourself against potential rises in the short or medium term, remortgaging to a fixed rate mortgage is an option that many consider. This will allow you to fix your rate at a set level for a predetermined length of time, two to five years are common, which can provide you with stability and enable you to plan your monthly budget for the term you select.
It’s important to remember:
There are a number of factors to consider when you’re thinking about a potential remortgage and we are on hand to help guide you with anything you want to know. You must be able to continually keep up your mortgage repayments to ensure there is no risk of your home being repossessed.
You may have to pay an early repayment charge to your existing lender if you remortgage.
At Miles & Barr our expert advisors have access to over 90 lenders so if you’re thinking of remortgaging but are unsure of anything you can get in touch face-to-face, or book an appointment over the phone.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
Mortgage Advice Bureau is a trading name of Mortgage Advice 4 U Limited which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority. Mortgage Advice 4 U Limited, Innovation House Innovation Way, Discovery Park, Sandwich, United Kingdom, CT13 9FF Number: 10785015.