Guide To Remortgaging Your House In Easy Steps

Guide To Remortgaging Your House In Easy Steps

The truly flexible option

A mortgage is a long-term commitment but staying with your current lender is most definitely not. All lenders offer a range of re-mortgage products, from trackers, fixed rates & offset deals as well as varying offer periods, normally between two & ten years; the choice is yours.

If you feel that the current economic market is fragile, you may want to opt for a five-year fixed rate. If on the other hand you feel that bank rates will stay low in the short term & may go even lower, then you may want to take a two-year tracker rate that tracks the Bank of England base rate.

You may also be in a position where you can afford to pay a higher mortgage payment each month, so switching to a shorter mortgage term may suit. Or it may be that you have a young family & want to increase your mortgage term to reduce your monthly payments until both of you can return to work.

Basically, a mortgage can be made to be as flexible as you require, as long as you fit the lenders criteria.

So, choosing a two-year fixed rate over a term of 40 years only means that you need to stay with that lender for two years. At the end of the two-year fixed rate, you could choose to swap to a five-year tracker rate over a term of 10 years if you so desired.

What about the costs?

Most high street lenders will offer a FREE valuation & FREE legal fee on remortgage cases. A lender administration fee of circa £999.00 – £1,495.00 is normal, but can be added to your mortgage so, other than our broker fee you can re-mortgage for very little cost.

However, bad credit mortgages specialist lenders often do not offer free valuations or free legals meaning it is important to understand the overall cost for the new initial term, this can mean that choosing a lender with a higher interest rate but offers a lower arrangement fee or free valuation & legals could end up saving you money over your new offer period.

Choosing the right lender and product is so important to ensure you are not paying more than is needed.

What could I save?

Taking someone with a home worth £310,000.00 with Halifax mortgage for £200,000 over 25 years that has come to the end of any offer period & reverted to the Halifax standard variable rate of 8.49% their monthly payment would be around £1,609.00.

If they switched to a two-year fixed rate of 5.99%, then the monthly payment would fall to circa £1,295.00 (including the lenders £999 fee). That’s a saving of £314.00 per month or £7,536.00 over the 24 months of the fixed rate.

If you are happy to tie yourself in with a longer fixed rate period, then lenders at present are offering even lower interest rates. The same lender Halifax in fact is offering rates of 5.59% which would reduce your monthly payments even further to £1,239.00 that’s a saving £370.00 per month or a whopping £22,200.00 over the 60 months of the fixed rate.

Fixing your interest rate for a longer period of time can be extremely helpful when managing your finances as it allows you to budget your outgoings more efficiently by knowing the amount you will be paying for your mortgage will not be affected by any potential interest rate increases.

However, it is also important to understand that whilst you are tied into a lenders fixed rate you will also not benefit from any potential interest rate reductions and changing lenders during a fixed rate period will likely lead to financial penalties called early repayment charges.

So, what do I need to do?

Simply speak to one of our Specialist Adverse Mortgage Advisors and they’ll be able to source from the whole of the mortgage market to find you the deal best suited to your needs.

They will be available at a time that suits you and will take the time to get to know your needs & desires and background circumstances to ensure we match you with the right lender to ensure that you are not paying any more in fees or interest than what is needed.

Once an appointment has been made with an adviser, you will need to provide the following so that the research is as accurate as possible:

  • Credit report, we recommend Checkmyfile as they have proved to be the most reliable https://www.checkmyfile.partners/5WTKZ8B/2CTPL/
  • Latest three months’ payslips (Employed)
  • Latest year P60 or P45 if you have been in your current role less than 12 months.
  • Latest two years SA302’s & tax overviews (Self-Employed) *
  • Latest three months bank statements
  • Proof of identity (Passport / driving licence)
  • Proof of address (Driver’s license, utility bill or council tax bill)

(SA302s can be requested from HM Customs by login into your HMRC portal or by calling 0300 200 3310 – You will need your National Insurance number when you call as a security check)

Your adviser will then take this information away & complete a thorough search of the mortgages available. When they find the most suitable product, they will complete a “decision in principle” with that lender. Your adviser will then follow up with you to make & explain their recommendation.

Once your mortgage application has been submitted, we will send you will receive automated updates once milestones have been reached and will also receive emails or telephone calls at least once a week. At the end of each update, we will let you know the date we are scheduled to complete the next chase of your mortgage application.

When your lender is satisfied that you have supplied sufficient evidence to meet their criteria & the property has met the required standards in quality & value, they will then issue you with your mortgage offer. Your mortgage offer shows the amount they are willing to offer you and the rate the money is being loaned at, along with other terms, conditions & costs. This, hopefully, will match the amount applied for. If you are not able to prove all income or have more debt than originally declared, then this amount may be reduced, or the application declined.

Once your mortgage offer is issued, we will then switch the focus of our chasing to your solicitors to ensure the legal process maintains a decent pace & isn’t being stalled over issues we are able to assist in as we want to make the process of re-mortgage as stress free as possible for you.

In the meantime, the appointed conveyancer will be completing the legal side of the re-mortgage &, once they have received their copy of the mortgage offer and any instruction paperwork they require, they will be applying to your current lender for a redemption figure. Once they have this, they will agree a date to complete, draw down the money from your new mortgage company & pay what’s due to your old mortgage company. Once this has been done, if there’s anything left, they’ll transfer the balance to you.

It’s worth noting that most lenders have a closing fee of approximately £250 so it’s worth borrowing a little extra on your mortgage to ensure there’s sufficient funds to meet your commitments.

Please note lenders policies vary & you will be required to meet set criteria. Some lenders have an “overhang” period where, even when you are out of your current offer period, they will charge you for leaving. Our advisor will be able to inform you if this is the case with your current lender.

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If you have questions about getting a mortgage with an adverse credit score, read our FAQs. Our wealth of knowledge within this market means that we’re confident in our ability to offer specialist mortgage advice and secure the mortgage you want regardless of your credit history.

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