Remortgaging

You could unlock monthly savings by remortgaging from a standard variable rate today!

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What is Remortgaging?

Remortgaging involves replacing your current mortgage with a new one, either with the same lender or a different one.

It can be done to take advantage of lower interest rates, raise funds, or change the mortgage terms.

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Remortgage to Get a Better Mortgage Interest Rate

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Better Mortgage Interest Rate

Remortgaging to get a better mortgage interest rate is an option for homeowners who want to reduce their monthly payments and overall interest costs.

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Switching Rates

Switching from a variable interest rate to a fixed interest rate can provide stability and peace of mind.

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Early Repayment Charges

Before remortgaging, homeowners must consider any early repayment charges that may apply if they remortgage before the initial mortgage term ends.

Remortgage to Release Capital

Homeowners looking to access the capital in their homes may consider remortgaging to release capital.

  • Home Valuation: The amount of capital you can release from your property depends on its current value. A professional valuation will be required to determine the maximum amount you can borrow against your home.
  • Loan to Value (LTV): The LTV ratio is the percentage of the property value that the lender is willing to lend against. For example, if your property is worth £500,000 and the lender is willing to lend up to 80% LTV, then you could borrow up to £400,000.
  • Secure the Remortgage: Finally, you'll need to work with your mortgage advisor to secure the remortgage and release capital.

When remortgaging to release capital, homeowners can choose to receive the money in one lump sum payment or as regular payments over time. It is essential to consider the interest rates, fees, and repayment terms carefully before committing to any capital release scheme.

A mortgage advisor can help you compare the rates, fees, and terms of different remortgage options and find the one that suits your needs and financial situation.

Speak to our mortgage advisor today.

Remortgage to Consolidate Debt

Remortgaging your home to consolidate debt can be a way to simplify your finances and potentially reduce your monthly repayments.

Home Equity Loans

Borrow against the equity in your property and pay off other debts to potentially lower your overall interest rate and monthly repayments, making it easier to manage your finances.

Secured Debt

Consolidating high-interest secured debts such as car loans through a home equity loan can potentially secure a lower interest rate and reduce monthly repayments.

Improved Cash Flow

By combining multiple debts into one monthly payment, homeowners may not only reduce their overall interest rate but also streamline their finances.

Local Mortgage Broker

To find the right remortgage deal for debt consolidation, it's important to work with a mortgage broker who can provide access to a wider range of lenders and help navigate the application process.

Benefits of Remortgaging

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Low Interest Rate Mortgage

When interest rates are low, the cost of borrowing money is lower, so you'll pay less interest over the life of the loan.

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Lower Monthly Repayments

Depending on the terms of your new mortgage, remortgaging can potentially lower your monthly repayments. This can help you free up some cash flow and reduce financial stress.

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Budget for a Mortgage

Creating a budget for a mortgage can help you determine how much house you can afford based on your income, expenses, and other financial obligations.

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Financial Planning

Financial planning can also help reduce stress by providing a clear picture of your current financial situation, identifying potential challenges, and outlining steps to overcome them.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage.

By adding unsecured debt to your mortgage the monthly payments may be lower but you will pay the debt over a longer term and will more in the end. Remember, interest rates can go up as well as down.

Remortgage for a Flexible Mortgage

A flexible mortgage is a type of mortgage that allows you to overpay, underpay, or take payment holidays without incurring additional fees or penalties.

  • Overpaying Mortgage: One of the main advantages of a flexible mortgage is the ability to overpay your mortgage. By making extra payments, you can reduce the amount of interest you pay over the life of your mortgage and potentially pay off your mortgage faster.
  • Offset Mortgage: An offset mortgage is another type of flexible mortgage that allows you to offset your savings against your mortgage balance. This can help you reduce the amount of interest you pay on your mortgage and potentially pay off your mortgage faster. Remember, the mortgage and savings account must be with the same lender.

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Remortgage Application Process

The remortgage application process can be a bit more streamlined than the initial mortgage application process. Here are some key steps involved in applying for a remortgage, along with information about how much a mortgage advisor may charge:
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Determine Your Eligibility and Goals

This involves assessing your current financial situation, considering your reasons for remortgaging, and determining if you meet the lender's eligibility requirements.

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Provide Documentation

This may include income statements, tax returns, bank statements, and other documentation related to your finances.

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Choose a Lender

You may want to consider factors such as interest rates, fees, and customer service when selecting a lender.

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Submit Your Application

The lender will review your application and determine if you meet their eligibility requirements.

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Property Valuation

As part of the remortgage application process, the lender will typically require a valuation of your property to ensure that it's worth the amount you're seeking to borrow.

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Closing

This involves signing the loan agreement, paying any applicable fees, and transferring the funds to pay off your existing mortgage and establish your new mortgage.

The documents you need to remortgage can vary depending on the lender and the type of remortgage deal you choose. However, some of the common documents required by most lenders include:

  • Proof of Identity
  • Proof of Income
  • Proof of Address
  • Bank Details
  • Mortgage Statement

Remortgaging can affect your credit score in different ways depending on your specific situation:

  • Credit Checks - this check will leave a record on your credit report, which can temporarily lower your credit score by a few points
  • Increase in Credit Utilisation - this ratio compares the amount of credit you're using to the amount you have available, and a high ratio can lower your credit score.
  • Closing Old Accounts - If you close your old mortgage account when you remortgage, it can lower the average age of your credit accounts, which can also lower your credit score.
  • Payment History - If you make your payments on time, it can improve your credit score, but if you miss payments, it can lower your score.

Yes, it's often possible to take out additional borrowing when remortgaging.

This means you can borrow more money on top of your existing mortgage to finance home improvements, pay off other debts, or for any other purpose.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage.

There's no set limit on how often you can remortgage but it's important to keep in mind that remortgaging too frequently can have financial implications.

It's recommended to remortgage only when it makes financial sense to do so, such as when interest rates have fallen, and you can save money on your monthly repayments, or when you need to access additional funds through capital release.

When you remortgage, your old mortgage is typically paid off and replaced by the new mortgage.

This means that the balance on your old mortgage is cleared, and a new mortgage with different terms and conditions is created.

The process of transferring your mortgage from one lender to another is usually straightforward. Your new lender will handle the details of paying off your old mortgage, including any outstanding fees or charges, and registering the new mortgage with the Land Registry.

Choosing the right mortgage deal with Lake District Mortgages ensures you get the right deal for your individual circumstances.

Here are some key points to consider when choosing a remortgage deal:
  • Interest Rates - The interest rate on your mortgage will have a significant impact on your monthly repayments and the total amount you pay over the life of the mortgage.
  • Term Length - A shorter term will typically result in higher monthly repayments but may save you money on interest over the life of the mortgage. It's essential to consider the term length carefully and choose a term that's affordable and meets your long-term goals.
  • Flexibility - Some mortgages offer more flexibility than others, such as the ability to make overpayments or take payment holidays.
  • Eligibility Criteria - Each lender will have specific eligibility criteria for their mortgages, such as a minimum credit score, income requirements, or minimum equity levels in the property.

Remortgaging can have several risks that you should be aware of before making a decision. These include:

  • Higher Overall Costs - While remortgaging can save you money on your monthly repayments, it's essential to consider the overall cost of the mortgage over its full term.
  • Early Repayment Charges - If you're still within the fixed term of your current mortgage, you may be subject to early repayment charges or exit fees. This means that the amount you owe on your mortgage is more than the value of your property, which could make it difficult to remortgage or sell your property in the future.
  • Negative Equity - If your property value has fallen since you first took out your mortgage, you may find yourself in negative equity if you remortgage.
  • Changes in Interest Rates - Interest rates can fluctuate, and if you have a variable rate mortgage, your monthly repayments may increase if interest rates rise.

Start thinking about remortgaging a few months before your current mortgage deal ends.

This will give you enough time to research and compare different remortgage deals.

Your credit score will play a significant role in determining the remortgage deals available to you.

Make sure your credit report is accurate, and take steps to improve your credit score if necessary.

When comparing remortgage deals, consider all costs, including arrangement fees, valuation fees, legal fees, and any early repayment charges from your existing mortgage provider.

It can be tempting to borrow more money than you need.

However, this can increase your monthly payments and the total amount you pay over the life of the mortgage.

At Lake District Mortgages, we understand that finding the right mortgage when remortgaging can be a daunting process. That's why we offer our expertise to help you navigate through the options and find the best deal for you.

Our impartial advice ensures that you are fully informed about the various mortgage types available and which one is most suitable for your specific needs.

We are committed to helping you make an informed decision and ensuring that the remortgaging process is as smooth and hassle-free as possible. Let us help you achieve your financial goals with confidence.

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