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Glossary of terms

What is a remortgage?

A remortgage is when you alter your current mortgage in some way by either moving it to another lender, at the end of your initial rate period, or borrowing further funds against an existing property.

 

 Do I need to remortgage?

Honestly this is entirely up to you, however there can be significant savings made by moving your mortgage to a cheaper rate prior to going onto your Standard Variable Rate (SVR). Generally, you’re looking to remortgage in order to save money or raise money if your current lender won’t let you borrow more but another lender might.

 

 How can it save me money?

Generally speaking a mortgage lender will sell a product with a rate based on a set period of time. This can be a fixed rate (where the rate doesn’t change) or a variable/tracker rate (where the rate can change depending on its type), with a few middle-of-the-road options such as discounted variable rates.

Let’s use a fixed rate example:

  • Lender X provides a 2-year fixed rate of 1.50% which works out costing you exactly £100 a month for your mortgage.

After the 2 years the rate will switch to the Lender’s SVR of 4.50%. This effectively means that you would then be paying 3 times the amount of interest you were before for the same mortgage. Whereas you could move the mortgage to a new lender that potentially provides a cheaper rate than you were on before and if not certainly a cheaper rate than the SVR with your current mortgage. This save you money!

 

Some of the main reasons to remortgage:

 

  • Your current mortgage term is coming to an end, this can be the full term or the initial rate period (eg end of the 2 years on a 2-year fixed rate mortgage)
  • You want a more competitive rate
  • Land value has increased or you think it will decrease
  • Interest rates are particularly low or you believe they will go up
  • Your current lender doesn’t offer certain facilities such as overpayments or further advances
  • You want to borrow more funds
  • You want to switch rate types
  • You wish to convert your current residence into a let to buy to buy a bigger house and rent your existing one

These are some of the main reasons you may want to remortgage.

 

Can’t I just do this myself though?

The short answer is yes. The longer answer is you can but it would take you a very long time of going to many lenders, some of which you’ve likely never heard of before so wouldn’t necessarily know were and option to you.

We can search for mortgages across the whole market for you with the knowledge to pick out lenders based on the criteria that fits your needs. As we are advice based we will only ever recommend a mortgage to you if you are better off taking it than not. We will never recommend anything, remortgage or otherwise, that doesn’t make sense to your situation. That aside there is no cost to get the quotes so there’s no downside to finding out your options and seeing what kind of savings are available to you!

 

How much will this cost?

This really depends on what property type it is. With a residential remortgage you can often find mortgages with no lender fees including free solicitors and valuations, with buy to lets this is sometimes possible but you’d normally expect some fees from the lender. Best thing to do is give us a call and see what’s available. Generally we’ll provide figures based on the total cost over the period (usually 2, 3 or 5 years) which will include any fees and any incentives provided, such as cash-back.

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J W Mortgages Ltd, 1 Bamburgh Close, Rushden, Northamptonshire, NN10 0TD is a company limited by shares. Our Companies House number is 1008660. We are also authorised and regulated by the Financial Conduct Authority. Our FCA number is 778180. The FCA does not regulate most Buy to Let mortgages.