Re Mortgage Advice

What is remortgaging and what are my options?

When you remortgage it’s often when your current fixed deal is coming to an end. You can either go ‘like for like’ which means swapping your existing balance to a new provider, or you can ask for some equity to come out of your property. You might use these to buy some assets, go on holiday or do some home improvements.

When is it a good time to remortgage?

Generally, when your deal is ending or you want to borrow more money. Debt consolidation is something that people do borrow for but we don’t encourage that. We really have to look into it to see if the client would be better off by consolidating their debts.

Some people who are paying a lot on loans and credit cards do wonder if remortgaging might make them a little better off. We take a good look at their finances to see if it’s worth their while.

With remortgaging generally a lot of people think they are a bit too early if it’s a couple of months away from their product ending – but that’s exactly the right time. We need to get everything in place for the offer to come out, so that when your mortgage rate expires with that particular deal you have the other one in place to switch over.

Ideally, talk to a mortgage broker at least six months before your product is coming to an end.

When is remortgaging not a good idea?

Remortgaging is not a good idea if you’re on a current fixed rate because you’ll always have an early repayment charge. If the markets were very good, and you were on a high interest rate and interest rates have fallen, your broker could get you a cheaper deal – but you still have an early repayment charge with your current mortgage lender.

Your mortgage broker would sort out whether it’s actually worth doing, because early payment charges can be quite hefty.

Can I remortgage if I have had bad credit problems since taking out my deal?

Don’t worry about it – speak to your broker. You may not be able to remortgage with another lender for a better deal, but all is not lost. As long as you keep the term the same and you’re not borrowing any more, you can do a ‘product transfer’ with your current mortgage lender.

It just means that you come off your current rate when that ends and stay with that lender on another rate. It’s possibly not going to be as good as changing to another lender, but at least you can still have your mortgage. With a product transfer the current lender will not do any further checks on you.

Why remortgage at the end of a fixed rate deal? What happens if I don’t?

It’s always a good idea to remortgage when your fixed rate is coming to an end because if not, you go on the lender’s standard variable rate. That is always going to be much more than you’re currently paying.

It’s best to start looking – or asking for a broker to look – for fixed rates with another lender, so you don’t go on the variable rate and pay over the odds for your mortgage.