Remortgaging

Becoming increasingly popular over the last ten years remortgaging is commonplace in today’s competitive mortgage market.

Prior to making the decision to remortgage it is important to establish a number of basic facts or the benefit of your remortgage may be significantly reduced by charges imposed by your current lender. Detailed below is a quick checklist of information we would suggest you have at your fingertips when considering moving your mortgage:

What is your current interest rate? The amount of your monthly payments? What limitations apply to your current mortgage rate? How long does your present fixed, discounted or capped rate last for? Are you tied into the variable mortgage rate and if so for how long? What early repayment charges will you incur if you were to pay off your mortgage early? Are any other fees involved?

How we can Help

Obviously prior to making any decisions comparisons from other providers should be obtained. At Flexible-Finance we can complete a full analysis of the market using the most up to date information available. There are several factors that we will look at in detail and discuss with you the main items being:

What limitations apply to the end of any product we are considering? Is there a lock in and if so for how long? What is the lenders variable rate – how does this compare? Is there any Higher Lending Charge to pay? (Higher Lending Charge is a premium paid to a lender in order to purchase an insurance policy against future loss. The premium is usually charged when borrowing is in excess of the amount the lender considers they can safely lend and be assured of their money being returned if any future financial problems occur. Generally this cost is being phased out in the market but you may still encounter this premium for loans above 80% of the house value. The cost of this is therefore to be taken into account when selecting a lender.) What other costs are involved in any remortgage scheme? What solicitors fees are incurred, valuation costs and set up fees?

Once all this information is available you will be in a position to make an informed decision on how you might wish to proceed. Flexible Finance Online mortgage advisors will be able to help discuss the options with you, answer any questions you might have and agree a course of appropriate action. As we have access to a large panel of lenders, our aim will be to arrange you a suitable loan with a lower interest rate than your current mortgage.

Information Required

There are a number of common items that will be required in order to obtain a new mortgage and listed below are the most common:

• 3-6 months pay slips
• 3-6 months bank statements.
• Most recent mortgage statement or an early repayment statement from your lender.
• Most recent P60
  Whilst the banks and building societies will all have different specific requirements these are usually required in all circumstances.

How to save thousands by remortgaging

Low interest rates means that it is an ideal time to remortgage your property. The level of remortgaging has risen sixfold over the last five years, according to figures from the Council of Mortgage Lenders.

Historically, switching to a cheaper deal is one of the easiest ways that homeowners can save money. But while many people are making the most of better rates, it is estimated that more than half of all borrowers are continuing to pay over the odds for their mortgage each month.

For example, someone with a £100,000 loan who switches from a standard variable rate deal could save about £1,000 a year for each one-percentage point reduction in their interest rate. As we have access to many lenders our aim would be to arrange a new mortgage with an lower interest rate than your current mortgage.

Slash your outgoings

Remortgaging has become much easier in recent years. More lenders are offering specialist remortgaging services - often with free legal and arrangement fees thrown in (subject to status and availability). Remortgaging is not only about saving money. As well as reducing your monthly payments, you can also use remortgaging as a way of releasing some equity that has built-up in your property's value. If you are tempted to release equity, it is still important to be cautious even though rates are low. Borrowing through your mortgage may achieve a lower interest rate than taking out a personal loan, but the debt is secured. This means that if you can not keep up with additional payments, you could risk losing your home.

Where do I start?

The first step is to check the terms and conditions of your existing mortgage. These will tell if you are tied-in to your mortgage deal or if there are any early repayment charges -previously known as early redemption penalty. If you are locked-in, you must decide if it is worth switching to a different rate or stay put until the early repayment charges have expired. You may have been with your existing lender for a long time and feel a sense of loyalty towards the company. However, most lenders do not reward this loyalty with a reduction in rates. You should therefore expect to shop around and look towards a different lender to get a better deal. The advantage of using a mortgage broker is that they will look at what different lenders are offering and they often have special deals, which are not available elsewhere on the High Street.

Which deal is best for me?

You will face a choice of broadly four types of deal: fixed, capped, discounted and flexible. Fixed-rate schemes are ideal for people who want certainty and must be able to regulate how much they will be spending each month. The rate is usually fixed for between two and five years. Discounted loans offer a reduction off the standard variable rate for a set period. If rates fall further, the rate that you will pay will also go down. However, when rates rise, so will your mortgage payments. A capped-rate loan will set a limit on the rate you will pay. If rates rise, your payments will not go above that level. However, if rates fall below the cap so will your repayments. Flexible mortgages allow you to overpay and underpay when you chose and without  incurring early repayment charges. This is ideal for people who have fluctuating incomes or who want to clear their mortgage early. An increasing number of fixed, capped and discounted deals have more flexible features as well.

What should I avoid?

While choosing a mortgage broker saves you legwork, it is important to ensure that you do not pay over the odds for the service. It is also wise to do your own research to compare the rates that a lender or broker is offering you. Avoid deals with extended early repayment charges. While these had been phased out in recent years, a number of lenders have reintroduced extended early repayment charges to clamp down on so-called 'rate tarts' who move around frequently to get the best deal. Extended early repayment charges are often hidden in the small print of a mortgage contract and were called early redemption charges.

How do I apply?

Obtain an 'early repayment statement' from your existing lender. This will tell you how much you owe. You must then complete an application form from your new lender, along with details about your income such as bank statements, payslips, a P60 form, mortgage statements and proof of identity. Your new lender will value your home. This will cost about £200. Most lenders will also charge an arrangement fee and you will have to pay legal costs of about £350. Some lenders offer dedicated remortgaging services with free legal work and valuations (subject to status and availability).

How long does it take?

It should take about a month to complete the remortgage. You will get a mortgage offer of advance, if the lender's surveyor is satisfied with the value and condition of your home. Your new lender will liaise with your existing company. Once you have received a completion statement from your solicitor or new lender, the process has finished.

Call 07831629483 for an appointment .