Why remortgage? It’s a pain, and you’ve got better things to be doing right?
I could tell you all the reasons why you should remortgage when the time’s right! But you want to find out for yourself.
Read on to find out the facts.
Okay so your mortgage deal is coming to an end or has already ended. Why do I need to remortgage?
Understanding why remortgaging is vital when the time is right is critical to your finances!
When you get a mortgage its for a set term (i.e. 30 years) and you probably would have secured a special deal for a period of this time. An example of this could be a 30-year mortgage with an initial fixed rate for the first two years.
So what happens at the end of the fixed-rate period?
Should you seek remortgage advice?
Why should you review your options and look to remortgage?
And if you don’t remortgage, do you still have a mortgage at the end of two years? There is a lot to think about! Our helpful remortgage FAQ’s might also help.
Remortgage and avoid the SVR:
One thing is certain. If you do nothing, you will revert onto the lenders standard variable rate (SVR) – which is usually significantly higher.
If this is the case, this means your monthly payments can jump up!
Make sure you do something about it, before it happens.
And remember, a remortgage might not be quick, so give yourself plenty of time.
At Barr Financial, we get in touch with our clients 4-6 months before the end of their deals. This ensures we can secure the best mortgage products for when their mortgage deals end.
Remortgage because your fixed rate is ending:
Originally you might have secured a particular type of deal i.e. a fixed rate because you like the security of knowing exactly what your payments will be. You might not have liked the thought of your mortgage going up unexpectedly! So the fixed rate deal made sense.
However, doing nothing after the fixed rate deal ends and reverting to the lenders standard variable rate (SVR) might result in exactly what you didn’t want…your interest rate going up unexectedly!
Going onto the lenders SVR is exactly the opposite of having security! Payments can change at any time. It is not linked to the bank of England base rate, and the lenders can change it anytime they want. Potentially leaving you in a vulnerable position.
Remortgaging is an opportunity to review:
It could be a great opportunity to review your situation.
Reviewing your options could result in some great outcomes, one of which could be reducing your term and paying off the mortgage quicker and therefore saving thousands on interest payments.
Remortgage can be a time to change and an opportunity!
Remortgaging isn’t just about getting a new fixed-rate, a better deal or something else!
You might want to borrow more money! Maybe it might help to consolidate debt or you have some home improvements to make!
A lot can happen in your life since the time you originally took out the mortgage, so use this time to review and think about your mortgage options. An independent mortgage broker will really be able to help but also advise you of any potential risks.
Can a remortgage make a positive impact?
You might be in the fortunate position to overpay and reduce your mortgage balance. This could have a significant impact, so why not consider this when you remortgage? Even a small amount helps.
This is the time and opportunity to make some positve changes. Remember your circumstances might have changed since you originally took out the mortgage, so if you can why not take advantage.
Overpaying your mortgage is just one of many options you could take to have a positive impact. You could reduce the term to repay the mortgage quicker. But equally, things might have got tighter financially, so you could consider extending the term to reduce the payments,
You don’t have to have the same terms as you originally had with your first lender. If something needs to change, this is the time to do it.
Remember, even if things don’t need changing, just getting a better interest rate will help you.
When it’s time to remortgage, take the opportunity and do something about it. It makes a huge positive impact.
Doing nothing with your mortgage will usually cost you!
We know it's not the most exciting subject or something that is on your priority list but trust me, it's important and could make a significant difference to your financial well-being.
Whatever you do, please do something.
Take the time to review your options, or get a professional mortgage adviser to do it for you. They will tell you what the best options for you are.
And remember if they are independent mortgage brokers (like us) they are tightly regulated by the FCA to ensure you always get the best and correct advice.
How to Remortgage:
Understanding the importance of remortgaging is one thing, knowing how to go about it is another!
Here are your options:
Review your mortgage with an independent mortgage broker:
An independent mortgage broker can help save you time, money and manage your mortgage, not just now, but into the future.
They will offer independent advice, recommend the best remortgage deals for you and assess all your options, including the options with your existing lender.
By looking at the whole market and your existing lender, an independent mortgage broker can help save you time, money and manage your mortgage, not just now, but into the future.
If you can find a team (like us) who you can trust and work well with, then it can remove a lot of the worry and burden for you.
Product switch with your existing lender:
If your lender offers you a deal you could just switch to another option, thereby avoiding the SVR, however not all lenders offer this!
For those that do, it could be a good option, however, there could be much better options in the marketplace. Other lenders want your business and they usually offer attractive deals to make it worth your while.
Remortgage to a new lender.
Looking at the whole market is critical to secure the best mortgage deal and there are some great remortgage deals available. The end result could end up saving you thousands, upon thousands of pounds!
Looking at the whole market is critical to secure the best mortgage deal.
Just because you already have a mortgage, should not mean you get complacent and accept the first thing that is offered to you.
The difference between getting any deal or the best deal could be the price of several holidays, or maybe even more!