What does remortgaging mean?
Remortgaging means moving your current mortgage to a different/new lender or product against the same property. This could mean applying to the same lender/bank or a new mortgage lender.
Remortgaging can help raise money for home improvements or a special purchase, but it is important to consider whether it is an affordable route, as your home could be at risk if you can’t make the payments.
It is worth shopping about for new mortgage deals if yours is coming up to the end. If your property is worth more now than when it was purchased, your loan-to-value ratio might have changed, and this might mean you have access to a wider range of deals.
Most lenders favour borrowers with less than an 80 per cent loan to value ratio in order to remortgage. Lenders will also look at your credit score. Some lenders might reject your application if you don’t have much left to pay, which might mean that staying with the current lender is more beneficial.
Credit scores are quite important, and it is worth checking your details against your credit score records; even a small spelling error in your address history could be a problem.
You can remortgage as many times as you like as long as you meet the equity requirements of the lender.
It is important to note that some mortgage lenders include charges when you leave under certain circumstances, for example, an exit fee or early repayment charge. This fee could be in the thousands so it is important to check your documents with existing lenders before taking any steps.
There are lots of mortgage calculators to help you see how much can be borrowed and what the monthly repayments might be. Interest rate calculators show how rate changes might affect your repayments. The calculator will help you decide whether re-mortgaging will save you money.
It might be useful to look into fixed-rate mortgages and their terms on your current mortgage, some lenders will allow you to remortgage even if you are in a fixed-rate mortgage agreement but may charge an Early Repayment Charge.
As you approach the end of your current mortgage and if you choose not to remortgage you will likely revert to a Standard Variable Rate ‘SVR’ these rates are usually higher than a mortgage deal that is set over a period of time.
Your mortgage term will largely be defined by age, and financial position, home price and loan amount, and down payment (deposit) a good mortgage term (number of years you will be set to make payments) is 30 years and will feature lower monthly payments.
SVR mortgage means your payments are likely to go up or down according to interest rates, these rates are usually set by the lender using the Bank of England Base Rate. The SVR can change at any time. SVR mortgages can be very expensive but you are unlikely to face any early repayment charges if you choose to do so.
Once you have considered a remortgage and perhaps decide that this is not the route you would like to go down, or you don’t qualify due to income changes or adverse credit and would rather sell your property, a cash buyer could help to alleviate any stress of mounting debt or an inability to remortgage.
Do get in touch with us here to see how we might be able to help. There would be no charges to you and no waiting for your home to sell.
It is important to ensure that you apply to authorised and regulated lenders only. Do also check that they are registered with the Financial Conduct Authority. Here is a link to their website ( https://www.fca.org.uk/ ) which might help in checking your lender for authenticity.
The Basic Steps…
- Agreement in Principal or AiP can be done online now and is an easy way to find out if a lender is willing to lend you the amount you need. This is done without a credit check. It is a simple way to realise your options before taking further steps.
- Do look for the following when remortgaging: Application fee, Valuation fee; this confirms the value of the property and Solicitor’s fee; who will help to manage your transfer.
- Once you have the AiP you are ready to apply for your remortgage. Lenders will ask for your personal and financial situation including any personal loans you might have, and details of your current mortgage.
- The final step is very similar to buying a new property. The new lender will carry out a credit check and valuation of the property and you will need a solicitor to handle the transfer too. It is worth checking whether the lender will offer this as a free service.
In some situations remortgaging is not an option and can prove costly or too binding for some people.
The good news is that you can still sell your property to a property cash buyer like Mark King Properties even if you are behind on payments.
Before fees and payments start mounting it might be an idea to request more information on how we can help purchase your property quickly and without any charges by filling in our form here.
We can have your mortgage settled so that you are free to move on to your next chapter without any of the financial stress of debts and mortgages. Our Solicitor will take care of the process and more information can be found about how solicitors might help with remortgaging here https://lyonsbowe.co.uk
There are a number of reasons why re-mortgaging is not a possibility some of these are listed below:
- Non-standard construction buildings
- Any structural issues eg non-compliant cladding especially in flats
- Short or defective leases
- Properties that are now in a flood zone due to environmental changes and are difficult to insure
- Properties that have sustained issues such as subsidence in the intervening period since they were originally purchased
- Other issues with properties – proximity to certain commercial enterprises such as pubs, petrol stations, historical heavy industries for example coal mines and land that may be deemed contaminated.
- Properties near watercourses such as rivers especially if there has been a history of flooding in the area.
- Properties that are in close proximity to Japanese knotweed can also become un-mortgageable.
Over time many lenders change their lending criteria and some of the issues that might not have been a problem before are suddenly reasons for mortgage applications to be rejected. Legislations are changing all the time.
If any of these are a concern or if you are unsure as to whether your property is likely to fail a remortgage application feel free to have a chat with Mark King, as a reputable cash buyer in the South Wales region he has extensive knowledge and experience of common issues that are region-specific and will always provide free impartial advice.
If your concerns are related to credit scoring or you would like to be free of further debt through mortgages or remortgaging, you can contact Mark King for a free, sincere cash offer on your property. The number to call us on is 02920 501 001. Or fill in our online property valuation form here.
Whichever route you choose to go forward with, it is always a good idea to do plenty of research on the products (mortgages) that are being offered. If there is any confusion and the jargon gets all too much, it is worth asking a friend or relative to clarify things or to speak with the bank directly.