Re-Mortgages

It is important to remember that your home may be repossessed if you do not keep up repayments on your mortgage.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

 

There are several different reasons to consider re-mortgaging your property. Whether it is to free up some cash for home improvements, to consolidate debts or to get a better monthly repayment structure than currently, or to restructure the terms of your current loan, re-mortgaging can be useful.

In fact, re-mortgaging can be beneficial to your financial health in many ways.

Simply put, re-mortgaging involves changing your current mortgage to a new arrangement, whether that be with your existing lender or a new one.

There are many benefits to this, however, before you decide to go forward, you should consider the risks and associated costs.

There are many questions you need to ask:

  • Is it worth doing?
    • How much will setting it up cost?
    • Can I afford it?
    • How will it impact my other borrowing?
    • Can I change the type of mortgage?
    • Can I go elsewhere or do I have to stay
    with my current lender?
    • Will any employment changes
    affect this?

Here at the Complete Financial Centre we are on hand to help you navigate the complex re-mortgage market and answer any questions you may have. We will ensure that you get the most suitable deal for you, taking into consideration your personal circumstances.

Your financial situation is unique so we work hard to understand your needs and aspirations and make our financial recommendations based upon that knowledge.

Why re-mortgage?

Many borrowers do choose to review their mortgage every few years to take advantage of the new rates on the market. If you decide not to change and remain on the original deal for the full term, you stand to lose out and could end up paying more money than you need to. You could also end up missing the opportunity to finish your mortgage term earlier than planned.

The main reasons to consider re-mortgaging are:

  • To avoid moving home: It can be more convenient and cost effective to enhance your existing property, rather than move home. This can be financed by re-mortgaging or a further advance.
  • To avoid losing money unnecessarily: when you took out your current loan, it would have been an attractive deal for you. However, since then, the market may have changed and you could save money on your monthly repayments or even repay your mortgage sooner. If your current lender cannot offer any better, another lender may be more beneficial to you.
  • To get a lump sum for a special cause: you may need to raise some cash for whatever reason. If your property’s value has increased, you could release some of the equity to help towards this.
  • To consolidate debts: Re-mortgaging can allow you to release some of the value you hold in your home and consolidate other debts that can attract higher rates of interest than that of your mortgage (e.g. credit cards).

(Think carefully before securing other debts against your home. While debt consolidation often reduces the amount of repayments, making them more affordable, it will normally involve extending the term over which you repay the debt(s), which often results in you paying more for the debt in total.)

 

The application process to re-mortgage an existing property and benefit from your new borrowing structure:

*Borrowing check – amount, affordability, loan-to-value, fees, and costs budgeted for, applied for credit file, seek a decision in principle
*Clarify specifics – capital raising, property enhancement, debt consolidation, better deal
*Mortgage recommended and application sent
*Conveyancing – instructed – by referral only
*Mortgage underwritten – validation checks on property, income & expenditure
*More information may be required as a result to satisfy lending requirements
*Valuation instructed – mortgage
*Mortgage offer obtained
*Check the re-mortgage offer – does protection match amount and term?
*Completion of legal contracts – funds drawn down from lender
Benefit from your new borrowing structure

While we will always do our utmost to make this process as easy as possible– please be aware that certain factors outside our control can delay the process. (e.g Property not valuing at the level expected, further proof of income required by lender.)

Should you re-mortgage?

Deciding whether to go ahead or not can be a difficult decision as there are so many factors to consider. We would advise the most important things to consider are; the amount of equity in the property, the savings/cash you have available, the purpose of the borrowing and your current mortgage arrangement.

Additionally, please be aware of, special ‘deals’ and ‘introductory rates’ offered by alternative mortgage providers which might look attractive initially, but could end up costing you far more in the long term.

There are many places, such as Money Advice Service, which offer free advice, however, when seeking mortgage advice, it can be distinctly more beneficial to seek advice from a qualified mortgage advisor who has extensive knowledge of the entire available market. They will be able to help you navigate the complex market and save you money in the long term. They will also be able to give you advice tailored to your specific circumstances.

Throughout this process, we’ll do our best to keep everything simple and straightforward. We ensure you deal with the same people and know that you can come to us with any queries or concerns.

Our mortgage adviser has over twenty years’ experience and will support you throughout. We keep our clients updated regularly in whichever format they require, (telephone, email, text or post – or indeed all if required.)

 

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