If you have been considering remortgaging your home, you undoubtedly have questions and concerns to address. Remortgaging is a big decision and a potentially daunting prospect, calling for independent expert advice at the earliest possible stage.
Our exclusive remortgage calculator can provide you with a quick and convenient overview of what to expect, if you decide to go ahead and remortgage your home. Enter a few basic details to learn more, or contact a member of the team at UK Property Finance for an obligation-free consultation.
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What is a Mortgage Refinance?
Refinancing your home basically means paying off your existing mortgage with an entirely new loan. The new loan may be taken out with an entirely different provider, or with your existing mortgage lender. Most borrowers however find that the best refinance deals (aka remortgage) are offered by competing lenders, rather than their current providers.
Why Should I Refinance My Home?
There are various reasons why people choose to refinance their homes, including but not limited to the following:
- To access a lower interest rate. If your current mortgage deal is less than competitive, you could save thousands of pounds on the life of the loan by switching. Use our mortgage calculator to see just how much you could save, if you are able to switch to a lower interest home loan.
- To shorten the term of the mortgage. Significant savings can also be made by shortening the term of your mortgage with a shorter-term refinance deal, often without having to pay a great deal extra each month.
- To switch to a superior lender. It could also simply be that you are not satisfied with your current lender for any given reason. If you believe you would be happier doing business with a different bank or mortgage provider, you may consider refinancing.
- To avoid lapsing onto a variable rate mortgage. If the low introductory rate on your mortgage is scheduled to come to an end soon, it may be beneficial to consider a competitive refinance deal, as an alternative to lapsing onto a costly variable rate mortgage.
- To raise funds for any purpose. A competitive refinance deal can also be an affordable way to raise funds for almost any purpose.
How Much Can I Borrow if I Remortgage?
Most refinance loans are taken out to repay the outstanding balance on an existing mortgage. If you still have £100,000 to pay on a £250,000 home loan, you would typically apply for £100,000 (plus extra for legal fees and admin costs, if applicable).
Remortgages can also be used to raise money against a property that is without a current mortgage.
It is also possible to apply for more, in accordance with the value of your home and your intentions for the money. As the refinance loan will be secured against your home, its value will be a primary determining factor.
Most lenders conduct the usual financial background checks and credit history analysis when considering applications for refinance. Sub-prime options are available for applicants with imperfect credit, though are often accessible exclusively with broker support.
How Much Does it Cost to Remortgage?
It depends entirely on the lender you work with but a good remortgage deal has the potential to save you a lot of money. One thing to remember is that your current lender could charge you an early exit fee if you are repaying your mortgage within an agreed term . The extent of the repayment cost varies significantly from one lender to the next.
Administration costs and arrangement fees may also apply with your new lender which is one of many reasons why it is important to shop around for a good deal. Many of the costs of taking out a conventional mortgage also apply when refinancing your home, therefore should be discussed with a broker before applying.
What Are the Alternatives to Remortgaging?
Alternative options vary in accordance with your intentions for the loan and how much money you need. For example, if you are looking to borrow a small amount, you could apply for a personal loan. If you need more than this, there are various types of secured loan options to consider. One of which is a bridging loan, which can be useful when the funds are needed quickly.
Remortgaging however is usually the best (or the only) option available when looking to save money on the long-term costs of your home loan. There are various different types of refinance options available, which in most instances are tailored to suit the exact requirements of the borrower in question.
What if I Have Poor Credit?
Qualifying for a competitive refinance deal with poor credit is not impossible, though does bring additional complexities and considerations into the mix. If you have any concerns regarding your eligibility due to imperfect credit, it is advisable to consult with a broker at the earliest possible stage.
Many independent lenders welcome poor-credit applicants’ though often offer their services exclusively via established brokers. Working with a broker can also help protect your credit score from any further damage, which may be inflicted if your application is declined elsewhere.
How Can I Ensure I Get the Best Possible Deal?
The key to getting an excellent deal on finance lies in comparing as many options as possible from mainstream and independent lenders across the UK. This is an extremely competitive segment of the market, wherein lenders are almost always willing to undercut one another to secure your business.
Commissioning an independent broker to conduct a whole of market search on your behalf is the best way to start, after which you’ll be able to decide whether or not to go ahead.
How UK Property Finance Can Help
At UK Property Finance, we understand how complex and confusing the refinancing process can seem. As an independent broker, we are able to provide the honest, impartial and objective advice you need to make the right decision for your financial future.
Use our exclusive online remortgage calculator for a brief overview of the options available, or call anytime for an obligation-free consultation with a member of the team. We will compare the market in its entirety to find you an unbeatable deal, with absolutely no obligation to go ahead at any time.