When is the right time to Remortgage?

Taking out a mortgage is a significant financial commitment and it is therefore essential to periodically evaluate whether you have made the correct decision for your individual circumstances. If you are sceptical about your current mortgage, it is possible to change the mortgage on your existing property from one lender to another and this is known as remortgaging. Own Homes has created a guide for clients to consider when remortgaging. If you require further assistance, please get in contact with a trusted Independent Financial Advisor (IFA), who will be able to offer specialist advice.

You may wish to remortgage if:

1. Your current mortgage product has come to an end.

You can remortgage at any time, but in order to avoid potential early redemption penalties it is advisable to remortgage when your current mortgage product has come to an end. It is however best to commence research several months prior to the end of an existing rate, providing clients with time to secure the optimal mortgage product.

If you do not search for a new mortgage, your lender will automatically place you on what is known as a Standard Variable Rate (SVR). With SVRs, you will likely be obligated to pay a higher interest rate than before and potentially you will miss the opportunity to obtain the most favourable deal.

2. Looking for a better deal than your current lender can offer.

It is advantageous to check if better rates are available than your current mortgage. Initial deals often bind borrowers to exit and early repayment fees, but it is nonetheless worth considering, as it could reap many future benefits.

For example, if the value of your home has increased, you may be eligible for a lower loan-to-value band, which carries lower rates. Furthermore, many lenders will offer flexible mortgages, allowing borrowers to miss payments. Perhaps you have changed careers or are reentering education - in these cases you would benefit from payment holidays, but you should expect to pay fees for this flexibility.

3. Planning to borrow more money and raise additional finances against your property.

If you are interested in borrowing more against the value of your property, finding a different mortgage may be advisable. Your current lender may decline requests for extra money or the terms of borrowing more are unfavourable, but there is probably a different mortgage which is more suitable. New lenders will ask why you require more money and it is worth noting that many will be less inclined to lend, if this is for a high-risk venture, such as a new business.

As an independent estate agent in Stevenage, we can make decisions quickly and tailor our property service to meet your specific requirements. Contact us today on 01438 367753 or via sales@own-homes.com.

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