How to get a mortgage

Remortgaging

Reasons to remortgage

There are plenty of reasons why you might want to remortgage, and they usually involve getting a better deal. The most common reasons to remortgage are:

  • Your fixed rate deal is coming to an end, and you want to avoid being moved to your lender’s standard variable rate mortgage
  • There are lower interest rates elsewhere
  • You want to free up some money by paying less each month
  • You want to get a bigger mortgage that pays off your current mortgage and gives you extra for home improvements
  • Your current deal doesn’t let you make overpayments, which you would like to do.

The disadvantages of remortgaging

Putting the legwork in and remortgaging can have great benefits, such as lower overall payments. But it’s important to rule out the pitfalls too.

  • Your current lender might charge ‘early repayment fees’ that you need to deal with before you can switch. These fees could outweigh the savings made on your new mortgage.
  • If your new mortgage lender charges ‘product fees’ (a one-off payment in order to get the mortgage deal), it might mean switching isn’t worth it.
  • If your credit score has changed for the worse, bear in mind that this will be checked when you apply for a new mortgage and could result in fewer good deals.

Product transfers

Many lenders will offer you something called a ‘product transfer’ when you’re coming to the end of your initial fixed rate mortgage period. This is likely to result in a slightly better deal than if you let your mortgage automatically run into the standard variable rate deal. It’s still worth shopping around though, as you might be able to get better elsewhere.

How to remortgage

If you’re happy with your current lender, you could go straight to them and ask them about your remortgaging options. In most cases though, it’s a good idea to talk to a mortgage broker. They can help you understand what remortgaging means for you, how to choose the deal that suits you best, and the paperwork you need to prepare.

Whether you’re applying for your first mortgage or you’ve decided on a better deal, it’s then time to make the application.

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