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Either way, a re-mortgage will most definitely need to be agreed in order to attain the required funds.
The mortgage lender will issue a re-mortgage
on the condition that you can provide collateral
if the repayments cannot be met. Such examples
of collateral could be another property, a car,
household items that hold substantial value or
the borrower’s home itself.
If you already have a mortgage don’t be
scared of re-mortgaging. It’s actually a
popular choice amongst homeowners, accounting
for almost 50% of mortgage business last year.
There are plenty of options available whether
you choose to switch your current mortgage over
to a better deal or if you want or need a little
extra cash.
No matter what situation you are in all lenders
will be able to offer you deal to suit your current
financial situation. There are many tools online
to help you calculate, such as a mortgage calculator,
how much money you could save from re-mortgaging.
Remember that all mortgage lenders apply some
sort of fee, but some do offer discounts or even
‘free extras’ packages.
The definition of re-mortgaging is simply to
switch your existing mortgage over to a new deal,
be it with your current lender or to a new one.
Standard Variable Rate (SVR)
When you first applied for your mortgage you
probably obtained the best deal at the time, which
means you are currently paying the lenders standard
variable rate (SVR). Don’t worry you are
probably one of millions. However there is nothing
to stop you from changing your deal and finding
a better rate, unless you have just completed
a special deal. Even if you have just finished
a better deal but have to pay a penalty charge
then the figures could add up so that a change
would still mean you could save money. Nowadays
with so many great offers available and the ease
in which re-mortgaging can be done we recommend
that you take advantage right away!
Switching you mortgage
If you have already decided that you would like
to re-mortgage you now need to find out if you
can. There are three relatively simple steps:
Step 1
Gather all the information you have regarding
your current mortgage. Depending upon what mortgage
you have you can determine if you can re-mortgage
right away or if you have to pay any charges.
Step 2
Compare your current repayment plan with that
of the new mortgage deal to see if you’ll
be saving money in this area. Ask your lender
if you have to pay any redemption penalties if
you were to leave your current mortgage. Don’t
keep your lender in the dark; tell them that you
are thinking of re-mortgaging. They will help
you contrary to what you might think.
Step 3
Be sure to note down how much it will cost you
to re-mortgage. Include redemption penalties,
arrangement costs, valuation charges and any legal
fees. Some lenders may offer a special deal, which
offers free valuation and cover any legal fees
as well.
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