Why remortgage, and what are the benefits?
Why should you remortgage? Aside from the key reason to potentially save you thousands of pounds, the mortgage world is constantly in flux!
Despite the stamp duty holiday ending in Scotland at the end of March and in England at the end of June, the property market continues to thrive, and new mortgage options are brought to the market weekly.
But these new mortgage products are not just for new buyers and they provide an important opportunity to ensure you are on the best rates and products possible. Furthermore, ensure you don't get ripped off paying more money than you should be!
Rates continue to change, and lenders are offering a great variety of product types and terms. For example, just this week, one of our lenders have announced they will consider cases up to 90% LTV including secured debt consolidation for remortgages, and free valuation and legal services, among other benefits.
While the headline figures for some mortgage rates have been less than 1%, some may not be available to all borrowers, and some are not beneficial for other borrowers. This is why we review the whole market and look at your long-term financial plan to ensure you can take advantage of the right mortgage products for you.
Furthermore, as a broker, we have access to lenders who have products that allow us to apply and lock in new mortgage rates up to 6 months before the date your current term is ending. Therefore, it is always worth having a conversation with a broker to look at options, even when your products are ending a few months away.
Some of the reasons to look at remortgaging are:
1. Your current mortgage deal is due to end in the next few months.
2. If the property's value has risen significantly, you may be eligible for lower rates as your loan-to-value band may be lower.
3. You want to borrow more money for home improvements or to pay off other debts.
4. You want a better rate but are still on an initial deal. You will have to pay an early repayment charge, which can be significant and an exit fee. However, if you have large mortgage debt, you may find the savings outweigh the cost. Your broker will review all the sums and can advise on whether this is a suitable route.
5. You want to overpay, but your current product won't allow that. A remortgage gives the option to reduce the loan. However, there may be early repayment charges or exit fees.
The area we experiencing quite a bit of growth is the continued drive from customers looking to release equity for home improvement work, whether that be a new garden office or upgrades to their home, and as noted above, a remortgage can provide the extra equity required.
Also, if you are a buy-to-let landlord, who signed up for a 5-year fixed mortgage after the government tightened regulations on buy-to-let activity in 2016, now is the perfect time to speak to a broker to review market opportunities. With experience in this sector, we can help you navigate the best deals for you and your business.
Whatever mortgage you have, when you agree on a mortgage deal, you sign up to what is known as an initial rate, and when that rate comes to an end, you'll move on to your lender's standard variable rate. These rates are the standard rate your lender has, and on average, are twice as expensive. So it follows that moving to a better rate as soon as possible means you can save money – sometimes £1,000s each year.
When you become a customer with Greenshoots Financial, we ensure we know all your product anniversary dates - mortgages and insurances and review the market for you, finding the best products for your situation. We can then sort everything for you in one quick phone call or email to you in many cases.
Please get in touch with us if you need any further advice.