When they want to buy a house, people get a mortgage. They find a lender able to provide the needed amount for the property. For an extended period, they pay monthly rates, established at a certain interest rate. It is one of the most common ways to purchase the desired house, since not everyone has the necessary amount upfront.
However, those who plan to remortgage can obtain a better mortgage deal or they need the extra money for other purposes, maybe to pay off debt, to remodel the house, for education, and such. is remortgaging suitable for you? There are many considerations to keep count of, and it is best to know as much as possible about the topic before going all the way.
What Means to Remortgage
A remortgage is when the property owner switches to another offer from their current dealer or decides to move to another one. Lenders have some attractive deals when interest rates are low, and this is tempting for homeowners that already have the mortgage for a while and want to save some money or obtain some more.
However, it is best to analyze the market, and your finances, to find out if the solution is right for you. Are there are fees that you should pay if you switch to another lender or any early repayment charges, if you decide to give up the current settlement? Discussing with every party ahead is crucial to not end up with more costs than before.
One of the most popular reasons why people want to remortgage is to release equity and obtain more capital from their home to undergo improvements. Perhaps you want a more flexible mortgage, or you want to make overpayments. Taking the time to prepare and access some great deals is important, because you want a better deal after all, not end up with more complications.
Research Remortgage Options
You can go to your current lender or approach a new one, depending on the available deals on the market. It is without saying that comparing deals is highly recommended. This way, you know exactly what the market offers, what are your gains, and see if everything is worth it. You can do everything on your own or you can discuss with a mortgage broker to obtain better insight. If so, you can contact us to benefit from excellent assistance.
It is more straightforward and rather simple to remain with your current lender, but you can get better rates at another provider. Therefore, it is encouraged to research the market and find the best solution for you, since you know the current rate, and what other features you benefit from. Considering the amount of money, you need and the purpose of remortgaging, weighing in all factors eliminates unpleasant situations afterwards.
Check the credit score
Have you verified the credit score? The report refers to your current financial status, loans, credit cards, overdrafts. The lender will go through a credit score to see whether you can repay the mortgage. Your credit score impacts the deals you can access. Even if you have a low credit score, you can still remortgage, but not all lenders are able to work with you.
If you have a strong credit score, then lenders have the certainty that you can pay the rates and you can benefit from better deals. Do you have any debts? Have you paid all loans at their due date? Do you have a credit card? Many aspects affect the credit rate, so make sure you know where you stand.
The application process
Doing research ahead of time helps time the application process. When you apply for remortgage and you get accepted, you need to pay charges and fees for the new deal. The lender conducts the check on your credit history. One aspect that can harm the credit score is the number of hard credit checks in a short time period, so don’t make too many mortgage applications.
Before you apply, lenders will offer an agreement to tell you if you will be accepted. It remains valid for a period, and make sure you know the duration. In the meanwhile, perhaps you find a better deal, so don’t rush into making the final decision without knowing all factors and deals out there.
Why Hire Mortgage Brokers
Not everyone is able to remortgage, and since there are so many lenders and offers out there, it takes time to compare them all. People want to get the best deal, but in some cases, they don’t have the time to contact lenders, to fill in applications, and maybe they require the money in the shortest time.
In these situations, hiring a mortgage broker makes sense. This specialist will look in your best interest, showing you the available options, verifying your credit score, putting you in relation with lenders, explaining the costs, fees implied, and everything you need to know to take an informed decision.
The broker will let you know the penalties that occur in certain situations, how to avoid further fees and costs, the charges involved to secure the deal. In some cases, you don’t have to worry about valuation and conveyancing fees when you switch to another lender, but this is not always applicable. Since you want to save money with a new mortgage, you should know the costs involved to get out of the current one.
Establish How Much You Want to Borrow
Do you know exactly how much money you need to borrow? You can use the available online mortgage calculators, to see the exact deal and to know the figure. This means you need to understand how much you need to pay each month and the outstanding loan amount.
To find out the equity and the LVT, you also need to know how much your property is worth. Maybe its value increased considerably over the years, and this is highly beneficial for you. You can contact a real estate agent to get an estimation or search other homes in your location and neighborhood.
