Remortgage

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What is a Remortgage?

Put simply, a Remortgage is paying off an existing Mortgage on a property by replacing it with another one. Remortgaging a property is generally done for the following reasons:

Benefits of a Remortgage

Of course, there are a number of benefits in Remortgaging. You can Remortgage:

There may be other personal reasons to release some Equity locked up in your property. Releasing the Equity by Remortgaging can cost you less per month than taking out shorter term unsecured loans. In fact this can be very useful when trying to budget on a day-to-day basis.

How do Remortgages work?

In our opinion, Remortgages are nearly the same as a normal Mortgage but can be done quicker. The stages are:

Application Form – After your application form has been submitted to the Lender of choice they will:

Do a Credit Search with one of the agencies to asses if you are Mortgage fit.
Asses all the supporting documentation (payslips, Bank statements etc)- docs you will need

Property Valuation – Lender will instruct valuation and appointed survey will assess the value of the property. Some Lenders will provide free valuation

Nominate & Instruct Solicitor – They will handle all the legal work for the transfer of deeds. Notably, some Lenders will provide free legal’s for a Remortgage.

Mortgage Offer – Once a Lender has assessed your application, supporting documents, valuation and are satisfied with all, they will issue a Mortgage. Next, a copy of this offer will go to your Solicitors who will repay your existing Mortgage and your new one will commence. This Remortgage process will vary with different Lenders and Solicitors, but as a rule takes 5 – 6 weeks.

Quick Remortgages

Due to various reasons, you might need a Rapid Remortgage. This time scale of 5-6 weeks could be made shorter, however it will depend on:

Some Lender and Solicitor combinations can get a Remortgage done in 2-3 weeks.

Call us for your options if you need a Rapid Remortgage.

When can I Remortgage?

Technically you can Remortgage at any time, however sometimes there can be factors which can make it financially unwise.

You could Remortgage when:

On a Standard variable rate (SVR )– if you are currently on your Lenders variable rate, there is a good chance that it will be higher than any fixed rate. Therefore, by moving to another cheaper Lender you could save 100s a month.
Your present fixed rate is coming to an end- Generally, most fixed rate Mortgage deals last between 2-5 years. When these deals come to an end, you will straight away fall on to your Lenders standard variable rate. (Also known as the SVR). Depending on this rate your monthly payments will usually increase. So, this another reason to consider a Remortgage.

Expert Tip – We think it’s wise to start looking for a new Remortgage at least 4 months before your fixed rate expires. Therefore this will make sure you have a seamless switch from one to the other.

When you shouldn’t Remortgage

If you are still in the fixed rate period of your current Lender

Generally, when customers are taking out a Mortgage they will go for a fixed rate. Usually this is between 2-5 years. During this period you are tied to the Lender and if you Remortgage, they are likely to charge you an early repayment charge (also known as ERC). Consequently, this charge can end up being several thousands of pounds.

Your loan size is not large enough.

If your loan is not a significant size (this varies from lender to lender) then some Lender will not consider the application. For instance in some situations, the Lenders arrangement fees and set up costs can be so high, the new Remortgage ends up costing you more in the long term. You need to do the maths.

Very bad Credit History

Whilst we cater for Remortgages with Bad credit, there will be some circumstance where we cannot help, ie Recent Bankrupt. In these situations we would advice not Remortgage and look for alternative borrowings.

Think carefully before securing other debts against your home. Consolidating debt may reduce your outgoings now, but you may end up paying more overall. Your home may be repossessed if you do not keep up repayments on your mortgage

Benefits of a second charge

Having a very good Standard Variable rate (SVR)

There are some very lucky customers that where fortunate enough have taken out Mortgages 20 years ago. Subsequently, after expiry of the fixed rate they went onto a Bank Base rate plus, meaning at the moment they could be paying 0 % interest. In these situation you are best to keep the present Mortgage and look at alternative methods for raising cash.

Does it cost to Remortgage?

As you all know nothing is free, so it does cost money to Remortgage.

With ‘Fee Free’ products the costs might not come directly out of your pocket up front, however you will pay for the cost through your monthly payments, so the cost are built into the product.

When deciding which mortgage deal is best to remember there will be 2 types of charging

Fee-Free Remortgages :The Remortgage market is very competitive with Lenders competing to win your business. So It is normal for Lender to offer products with Free Mortgage Valuation (or Valuation refunds). Also sometimes a ‘Free Legal Package’ included free of charge, as well as no or low application fees. All the charges & fees will be discussed with you prior to submission of an application form.

Fees charged : These lenders will charge you a Valuation fee along with Application fees. You will also have to pay for your own solicitors or conveyancers. However, that said sometimes the interest rate can be cheaper than a fee free mortgage. So, if you are happy to pay upfront fees then these are the Lenders of choice

To conclude, deciding what kind of Lender to go with is not easy as the pro’s and con’s of one product vs another can be quite complex. If you are doing a DIY Remortgage it is not easy to compare the top lender and their overall charges over a 2 year or 5 year period. Furthermore, it is tricky accessing which is the cheapest deal. It is important to be careful as the difference between your best 5 could be £1000’s.

Therefore, to help you do the Maths and choose the right product contact our Remortgage Brokers for a non-obligation chat.

Remortgage with the same lender

Technically this is called a product transfer and describes the process where your present Lender offers you a new rate to stick with them. Usually, this will happen upon or nearing the expiry of your current deal.

There are many pro’s and con’s of remaining with your current lender. The main benefit being that if simply making a like for like change, with no additional borrowing or extra activities needed, it makes the process simple & cheap.

A competent Mortgage Broker will consider your current lenders porting rate and compare it to the best in the market, not just on rate but on overall cost over the term of the mortgage. Thus ensuring you can feel confident that the option you choose is the most appropriate.

Expert Tip – Whilst a ‘Product Transfer’ can be easy to do and have no initial costs, if the rate your present Lender is offering is not competitive then remaining with your current Lender may not be right for you.

Most suitable Remortgage rates

A professional Mortgage Broker can search for deals across the UK Mortgage market and at the touch of a button show you the latest interest rate criteria. This, along with having access to exclusive deals that aren’t available on the high street, can help him match you up with the right lender according to your latest needs and circumstances.

Most suitable Remortgage lenders

The Mortgage market is very competitive, containing 70+ lenders with 100s of products. All these products having their own criteria and method of looking at an application. The word “best” should be used in the context of “what is the best mortgage for you at the time of application”.

This is where a Competent & Experienced broker can help with trawling through all of the market and come up with ‘Your Best Mortgage’.

Remortgage Online

Technology has played a big part in the Mortgage industry for some time now, however during the COVID-19 pandemic, the benefits of technology came to the forefront.

As with a majority of Mortgage brokers, in order to thrive in our marketplace we need to get your Remortgage to offer & completion in the shortest space of time. Therefore, you will find that a vast number of our Remortgage are done online.

Set you up on your own secure Portal, where you can provide us with all your Personal information and send us required Documents securely
Discuss your Lender & Product of choice online
Lender application will be submitted online
Online Solicitors
Online completion with any Money Surplus going into your account

We understand that sometimes things will need the human touch, so we will always be available for Zoom or Teams meetings allowing a mixture of Tech and human interaction.

Why Us

our Mortgage Butler service

Help you to collate all of the documents you will need to apply for a mortgage
Complete and submit your application
Handle all the enquiries by the Mortgage Lender
Liaise with your Estate Agent
Help you to nominate a good & competitive solicitors
Work with all the parties to get you to Mortgage completion
Keep in touch with you on a yearly basis and help with your future needs

Berks & Bucks Finance has a commercial arrangement under an affiliate programme with Check My File and is remunerated for referrals.Please be aware that by clicking onto the above link you are leaving the Berks & Bucks Finance website. Please note that neither Berks & Bucks Finance nor (the Network) are responsible for the accuracy of the information contained within the linked site accessible from this page.

Second Charge Mortgage services are referred to a third party. Neither Berks & Bucks Finance nor PRIMIS are responsible for the service received.

FAQs

Can I Remortgage to buy another property?

The simple answer is Yes. This is a very common reason why our customers Remortgage, to use the money to go towards the purchase of a :

buy to let property
holiday home
second home for elderly relatives

The lender will need to know the reason why and we must make sure the maths work.

Remortgages for people with bad credit?

Unfortunate as they are events that can create a blip on your credit report and suddenly you find that the standard Lenders start refusing your Remortgage application.

Fortunately, we have Specialist Lenders that will consider a Remortgage for customers with ‘Bad Credit’. All these Lender have varying criteria, however generally they will look at applications with:

Missed Mortgage Payments
Mortgage Arrears
Defaults
CCJs
Bankruptcy (satisfied 3 yr ago )
IVAs ( completed and satisfied at least 3 years ago

As you can see these Specialist Lenders do not use a one size fits all approach and will use the human touch to assess your case

Can I Remortgage my house to buy another business?

Yes we have Lenders that will consider a Remortgage for Business, however if you are Remortgaging with a view to investing the Money surplus into a business then be prepared for the Lender to ask about the specifics of the business in fine details.

In general Lenders will not lend towards business of speculative or risky nature and have a preference towards favouring business which are property based.

Due to the commercial nature of these kind of transactions you will find that the rates charged will be higher than normal, but that’s to be expected.

Can I Remortgage with a secured loan Remortgage?

Yes, you can Remortgage with a secured Loan in the background. However as with all Lending, your existing loans will be taken into consideration when assessing your Mortgage affordability.

So having a loan will affect the amount you can borrow, however if you are borrowing to pay off the loan then this would help your Remortgage application. If successful the Lender could instruct the Remortgage solicitors to make sure the loans are paid off.

Secured Loan or Remortgage?

The Secured Loan market has grown over the recent years and Secured Loans now form part of a Mortgage Broker tool box, with Secured Loans used as solutions to a variety of problems.

Whilst a Remortgage should be a better choice from a rate point of view, some Remortgages might not be financially viable. For example:

On a very good variable rate, which you should not disturb
Tied into a fixed rate with early repayment charges
Have complicated income which is not acceptable to a standard lender
Your property is not accepted as security by a Standard Mortgage Lender
Need the home improvement monies over a shorter term than a traditional Remortgage

Second charge mortgage services are referred to a third party. Neither Berks & Bucks Finance nor Primis are responsible for the service received.

Think carefully before securing other debts against your home. Consolidating debt may reduce your outgoings now, but you may end up paying more overall.

Your property may be repossessed if you do not keep up repayments on your mortgage.