REMORTGAGES
A remortgage is a way of changing from your current
lender to another lender.
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One of the main reasons to remortgage is simply
to find a better deal than your current mortgage. Remortgaging
can also be effective at releasing any equity you have in you
property. By doing this, the extra funds can be used for home
improvements, debt consolidation or even paying for a new car.
During the remortgage process, the existing mortgage lender will
be paid the outstanding mortgage balance which will then be
followed by you borrowing either the same amount or larger
depending on whether you will be releasing some equity in your
property.
For most people a mortgage is their biggest regular expense and
consumes a large proportion of their monthly salary. Because
it's such a huge commitment, it's crucial to get the right
solution. Failing to get the right deal could prove to be very
costly in the long run. You need to be aware of all the options
and be sure you're not missing out on products which could save
you a fortune in interest payments.
When you are looking to remortgage it could save you time and
money to use a remortgage broker. Remortgage brokers are
specialists in this area who are able to offer you advice and
assistance in order for you to find the best remortgage product
for you. If your current mortgage deal is going to expire
shortly, you can arrange to switch lenders through a remortgage
broker who will be able to find you a new mortgage deal that is
right for you.
Remortgaging can be a very confusing and stressful time,
particularly if you are not confident when dealing with
financial matters. It can sometimes be beneficial to go through
an expert for advice. A remortgage broker will not only be able
to offer you independent mortgage advice, they will also be able
to arrange the remortgage for you. This will save you time as
you won’t have to do endless research looking for a re-mortgage
deal that you think is right for you only to discover in the
future that you have made the wrong choice.
When considering remortgaging, your next step should be to think
about whether you need to raise extra capital by releasing more
equity in your property. This can be done by remortgaging for a
larger amount than the existing balance of your mortgage. Your
existing property will need to be valued by your new lender to
assess its value. The lender will then be able to assess how
much they are willing to loan to you in comparison to how much
you are able to afford to repay on a monthly basis. |
To obtain whole of market advice from a qualified adviser (who
will act for you and not the lender) simply complete the short
online enquiry form and press PROCEED.
To help the process please enter as much
information as possible.
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Discount Mortgage
A Discount Rate mortgage relates to the interest rate
that you will be charged for borrowing the loan. For an
agreed period, usually 2 to 3 years, you will be
eligible to discounted interest rates. This means that
you will be paying a percentage below the Standard
Variable Rate (SVR). Therefore, you have a guaranteed
lower rate for a set period of time. This is a cost
effective way of remortgaging as you will be paying
lower monthly repayments to the lender, however after
the discounted period has ended you may have to switch
to the lenders current SVR for a length of time before
you are able to remortgage again to a better deal. This
will increase your monthly mortgage payment during this
period which is a factor that you should be aware of.
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| This is a mortgage product that focuses on the
interest rate available. It is predominantly marketed as
a product that will follow any changes made to the Bank
of England base rate. Lenders will offer you the
facility to opt for an interest rate that is a set
percentage above the base rate. This will be agreed
prior to the completion of the mortgage. The agreed rate
will be subject to change in accordance with any
fluctuations of the base rate. This means that tracker
rates can go up or down which will impact the amount of
your monthly mortgage repayments. |
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Fixed Rate Mortgage deals on offer in the UK are
typically on offer from 6 months to 5 years, although
there are some fixed rate mortgage lenders now offering
lifetime mortgage rates.
The obvious advantage of a fixed rate mortgage is from a
budgeting perspective, as it protects the borrower from
unwelcome interest rises, although conversely if
interest rates fall you may be stuck with a rate that is
uncompetitive.
Some of the advantages of a fixed rate mortgage include:
• Straightforward budgeting because you usually pay a
fixed amount each month
• Save money by keeping your existing interest rate even
if the Bank of England base rate rises |
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Fixed v Discount / Tracker |
When choosing a mortgage and you can’t decide
whether you want a fixed rate or a discounted / Tracker
rate. You should always ask yourself whether it is
surety that is more important or if it’s cheapness.
At the end of the day it is your choice what you decide
to go for but do remember that fixed rates are safer
even though the discount / Tracker rates may be cheaper.
But as with anything in life there will always be
exceptions. |
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| If you have an existing fixed, capped or discounted
rate mortgage, or if you received a substantial cashback
when you took your current mortgage, there is a real
chance that an early redemption charge (ERC) will apply
on your loan. It is important to work out the redemption
costs carefully. Remember, it may make sense to wait
until the ERC period has passed before you switch your
home loan. |
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