What is a Remortgage?
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A remortgage is where you take out a new mortgage on a property you already own - either to replace your existing mortgage, or to borrow money against your property. Below are the reasons you might want to do it.
Our mortgage brokers in Kent have a wealth of knowledge and experience and are experts in providing advice that best suits you. Whether you are looking to find a more competitive interest rate or free up capital, our expert local mortgage brokers are at hand to advise you. Prospect Tree Mortgages assess the entire market to make sure we get you the best possible terms, we offer quality service, discretion and the ability to work complex lending scenarios. Get in touch with for mortgage advice Kent. |
Your current deal is about to end
Many of the best mortgages only last a short time – often two to five years – the typical length of time offered on a fixed rate, tracker or discount mortgage. When it comes to an end, your lender will put you on its Standard Variable Rate (SVR). It is likely to be higher than your old interest rate and higher than other mortgage products available. If so, you want to be ready to remortgage to a cheaper rate. We would always suggest getting in touch with us three months prior to the end of your fixed rate period. You want a better rate If you are tied into a fixed rate product then you might have to pay an early repayment charge (2-5% of your outstanding loan) which may not make financial sense. This doesn't mean you shouldn't consider it as the savings can be substantial. It is best for us to calculate whether it is cheaper to change product or stick with your existing product until it comes to an end. |
Your home's value has gone up
If the value of the property has risen rapidly since you took out your mortgage, you may find you're in a lower loan-to-value band, and therefore eligible for much lower rates. Again, it is best for us to calculate what savings can be made so you are in an informed position before deciding what you want to do. You want to overpay & your lender won't let you Most lenders will allow you to overpay by up to 10% of your outstanding balance per annum. If you want to pay off a significant amount of mortgage debt then a remortgage will allow you to reduce the loan as well as accessing cheaper loan to value products. Again, you need to be aware of any early repayment charges that may be payable if you remortgage out of a fixed rate early. We would be able to compare this to how much you'd save with the new, lower mortgage. |
You are worried about interest rates going up
If like most people you want to make sure you have stability of payments. When you take a fixed rate product you are protected from any fluctuation in interest rates during the fixed period. You want to switch from interest-only to repayment mortgage You shouldn't actually need to remortgage to do this, your lender should be happy to make the change for you. You can even change part of the loan to capital repayment and leave some on your interest-only deal, which is particularly useful for anyone with an underperforming endowment mortgage which is expected to result in a shortfall at the end of the term. However, it's a totally different story if you want to change from capital repayment to interest only. |
You want to borrow more
Remortgaging to a new lender might enable you to raise money cheaply on low rates. But remember to take all the fees into account to see if it really is cheaper than other forms of borrowing. A lender will want to know what the additional money you want to borrow is for, most reasons are absolutely fine, but many have an issue with borrowing against your residential property for business purposes. The most commonly acceptable reasons to raise money are for home improvements and paying off other debts. Just be prepared for your lender to ask for evidence if you are borrowing a large amount, e.g. builder quotes, or proof that you have paid off the debts. Our mortgage brokers in Kent have a wealth of knowledge and experience and are experts in providing advice that best suits you. Whether you are looking to find a more competitive interest rate or free up capital, our expert local mortgage brokers are at hand to advise you. |
