As specialist mortgage brokers, we are experts in all types of mortgages. So what does remortgage mean? A remortgage is taking out a new mortgage on existing property you own. The remortgage maybe simply to replace the existing loan amount or mortgage for a better rate or it could be to borrow further money against your property. This can be for many reasons, for example for home improvements, divorce settlements or even to purchase further properties.
Loan to value means the % borrowed against the value of the property.
Example - The property you are purchasing is £200,000, and you have a deposit of £20,000 this would be a loan to value (LTV) of 90%.
Your home now is valued at £500,000. However you still have an outstanding mortgage of £250,000- so your LTV is 50%.
Generally, the higher the loan to value, the interest rate will increase. Therefore if you have a larger deposit or equity in your home, you will typically achieve a better interest rate.
Whether you are employed, self-employed or your income comes from rental or a pension, we will have access to a lender, to obtain borrowing.
The amount of borrowing depends on individual circumstances, that is why speaking to one of our advisers is always the best way to find out how much you can borrow. Our advisers will review all your income sources and expenditure. They also check your credit report in the meeting to ensure that the advice is based on your current circumstances.
Please do contact us to arrange a virtual meeting with one of our advisers.
Generally, you can re-mortgage your home at any time.
However, you should bear in mind that If you are on a fixed rate deal and your current product is not due to expire in the coming months or years, a re-mortgage before this comes to an end may incur early redemption penalties which will be payable to your existing mortgage lender.
These tend to be a percentage of the total outstanding loan, so can be quite large in some instances. It is always best to time a re-mortgage to fall in the window where you product is expiring (if this is possible). There may be circumstances where waiting until the end of the existing deal may not be an option.
We liaise with both you and the lender and as a whole of market broker we will find the the best current rate available to you on the market.
When you meet with one of our advisers they will determine the following:
The length of time you fix your mortgage for depends on your individual circumstances. The general rule of thumb is that the longer the term the higher the interest rate. Additionally, the higher the loan to value the higher the interest rate. Most lenders offer 2 and 5 year fixed rates and some over 10 year deals as well.
Our advisors can review your circumstances and discuss the best option for you. Would you prefer certainty of your mortgage payment over a longer term, such as 5 years, or do you require the lowest rate for a lower monthly mortgage payment, this is generally over 2 years.
However long you decide to fix your mortgage interest for, rest assured, we will contact you up to 6 months before your deal ends, so that you don’t end up on the lenders standard variable rate.
In short, you would be able to pay of your mortgage quickly, by increasing your monthly payments or by paying in a lump sum to reduce the term of your mortgage.
However, this depends on various factors and it is important that you check what overpayment facility your lender allows. Most lenders will allow you to pay off up to 10% of your outstanding mortgage balance, each year penalty free.
If you are on the lender’s standard variable rate, then you are usually free to pay as much as you like on top of your monthly mortgage payment. You should always refer back to the original mortgage offer.
Please do contact one of our advisors, who can review your mortgage and current financial circumstances, to assist you in making a decision, suitable for you.
Your existing lender may agree to allow you to port your existing mortgage product to a new property.
When you sell your existing home and are looking at buying a new one, you will still need to apply for a new mortgage. This is because the loan itself does not transfer over to a new property, only the interest rate and the terms and conditions of your current product transfers over to the new property.
You will still need to go through the lenders affordability assessments, valuations, and legal processes for the new purchase, but by porting the existing product, you would not have to pay any penalties for redeeming the mortgage on your existing property early.
As part of the moving process, your existing mortgage is paid off in full and a new mortgage is taken out against the new property. Porting will allow you to remain with the same lender, keep your current product and apply for any additional ‘top up’ loan needed to complete the purchase of your new home.
A ‘top up’ loan is usually an additional borrowing amount above and beyond the amount to be ported and will sit as a separate mortgage part on a different product from the lenders current offering. This scenario is more common, when the new property is more expensive than the current property and requires a mortgage higher than the amount to be ported. Availability of any additional top up borrowing will depend on your lenders affordability criteria and your personal income/circumstances at the time.