Remortgage Guide
Remortgaging means moving your mortgage loan from one lender to another, usually
for a cheaper rate or better mortgage product.
Reasons to leave your existing lender
- The early repayment charges on your current mortgage deal have expired and the current
lender is unable to offer you a better deal to stay with them
- You are paying the lenders standard variable rate and there are better deals in
the market
- You are about to undertake expensive home improvements and need a loan to cover
the expense
Releasing funds
Remortgaging is often used as a way to pay off more expensive loans or credit cards.
Remember to exercise caution before borrowing additional money to repay your debts
, you will potentially pay more interest by consolidating if the loan is increased
and the term is extended. Always consult with a financial adviser to make sure this
is the right decision to you.
Financial matters
How much can I borrow?
The amount you can borrow will be based on an assessment of your individual circumstances.
Lenders have different methods to calculate maximum lending either based on the
traditional income multiple i.e. 3 x your annual income or on an affordability basis
where a computer based model is used.
What fees are involved?
There are a number of fees that you will need to budget for. An up front valuation
fee will be required, the cost will vary according to the estimated value of the
property and it's location.
Some lenders will require arrangement and rate reservation fees, either to be paid
up front or in some circumstances be added to the mortgage advance.
You will also need to consider solicitor's costs.
Some lenders offer special deals that help towards these costs, check with your
financial adviser to find the most effective mortgage deal.