Remortgaging: Tips to save you money
What is remortgaging?
Remortgaging is basically the process of changing your existing mortgage supplier and switching to another mortgage product from a different provider. Almost a third of all home loans made in the UK are actually remortgages. There are many advantages to remortgaging your property.
When is the good to remortgaging?
The purpose of remortgaging is usually to save money on monthly payments. You can compare the different options available to you. Here are some main reasons why you might look to remortgage.
- If your current fixed-term rate is about to end, and you don’t want to pay a variable rate. then it could be a good time to remortgage.
- You have come across a better rate on the market you’d like to access.
- You want to overpay your mortgage and your current provider won’t let you do this without a bunch of fees.
- Another reason might be in order to release equity from your home, allowing you to access some extra cash while still continuing to live there.
- Your home’s value has gone up a lot since you took out your mortgage.
If you are remortgaging to consolidate debt, be careful and speak to a debt organisation like the Citizens Advice Bureau. This will save you from putting yourself at risk.
What should I do before considering to remortgage my property?
Get expert advice
You must get advice from a qualified financial expert. You will get the best options this way. Further, if your mortgage or advice don’t turn out suitable or something goes wrong for some reason, you can complain to the FOS (Financial Ombudsman Service).
Must check your credit score
When you are remortgaging your home, you’ll go through the same application process you had for your current home including all the credit checks. Thus you must check your credit score before reapplying to avoid any disappointment. Which you can do for free through different sites like Clearscore and Experian.
Must check for hidden costs
Switching to a new mortgage before the official end of your deal usually involves a fee. This fee is called an early repayment charge. Additionally, there might be the usual legal, valuation, and administration costs involved that you should consider.
How to find the best remortgage deals
1: Start searching early
Don’t take remortgaging lightly. You must do plenty of research for finding a new provider well before your switching date is crucial. If you are considering remortgaging your home, start searching for options as early as possible.
2: Get your timing right
Most mortgage lenders allow you to secure a rate up to three months in advance. But you won’t have to start actually paying the mortgage right away. For instance, if your current mortgage deal ends in August, but you find a great deal in May, you don’t have to pay a fee to leave our deal early. You can lock in the better rate instead and continue paying off your current mortgage until your switching date.
3: Check with your current provider if they can match your new deal
After you know the sort of deals out there and what to expect, it’s always worth reaching out to your current mortgage provider. They may be able to match the best remortgage deal you can find. Consequently, this can save you plenty of time and money, as you won’t have to actually go through the full remortgaging process and switch providers.
Ross Counsell, Director of GoodMove, says:
“Remortgaging is something which many homeowners will avoid simply out of fear. But, the remortgage process can be extremely important as its one of the best ways for homeowners are able to save money.
“A mortgage tends to be the biggest investment in a person’s life, so it’s important to know your options and be aware of any possible remortgage savings. Even if you think this doesn’t apply to you, it’s important to not leave things until the last minute especially in this uncertain climate.”