Remortgaging is a significantly beneficial method that works by renewing your mortgage’s interest rates and helping you save money. It is a process in which an individual can take a new mortgage on a property they already own. It is usually done either to replace the current mortgage with lower interest rates or to borrow money against the property that you own.
Whatever may be the case, remortgaging is an excellent tool that offers multiple benefits to its users. It might amaze you to know that every third home loan in the UK is actually a remortgage. That being said, how can you get the best remortgage deals? Let us uncover that in the blog below.
Why Should You Remortgage?
Before jumping ahead and exploring how to get the best remortgage rates, we should first look at some valid reasons why you might need a remortgage deal.
- Your Current Deal Is Ending: Majority of mortgage deals are often signed for the period of two and five years. Following that, the lender puts a standard variable rate (SVR) that is higher than your previous interest rate. So to dodge the new hiked rate on your mortgage, remortgaging is a viable option to consider.
- The Value of Your House Has Shooted Up: In case the value of your house has rapidly gone up since you took out the mortgage, you might find yourself in a lower loan-to-value band. This means that your house’s interest rates should be much lower and you might want to re-evaluate your mortgage.
- Your Lender Isn’t Letting You Overpay the Dues: There might be a situation when you get a good raise, and you wish to lay off your loan, but your current mortgage terms are stopping you from doing so. In that scenario, you must compare remortgage deals from different lenders and switch to one which offers the best advantages.
- You Want to Increase Your Borrowing Limit: Mostly, the current lenders of your mortgage stick to the signed terms of your mortgage deal and won’t increase your borrowing limit. However, remortgaging to a new lender may enable you to get more money at lower rates.
- You Want A Flexible Mortgage: You might prefer to shift to a flexible mortgage if you don’t have a consistent source of income. Several mortgage deals offer you a break on your payments and lets you pay back as per your convenience. Remember, you may have to pay a little extra if you wish to take any such deals.
Finding the Best Mortgage Deal
To find the best remortgage deals with no fees or small fees, you must be aware of the following:
- The estimated value of your home.
- The annual income of you and anyone else who will be a part of the mortgage.
- The money you owe on your current mortgage.
- The value of the percentage of the house you want to borrow money on.
Comparing Remortgage Rates
Once you are well-acquainted with above-given pointers, you can move to the next step of comparing different remortgaging deals. Here are a few tips on how to compare remortgage deals:
- Get a Mortgage Quotation from Multiple Lenders: Apply for a remortgage loan with different lenders such as banks, online lenders, and credit unions. The more you will explore the market, the better opportunities and deals you will find.
- Use Loan Estimates to Compare Closing Costs of the Loan: Ask for a loan estimate form from every lender that will provide you with the details of each loan’s terms and fees. This will help you make the right comparison.
- Shop Within a Set Window of Time: When applying for a loan, there is a window of 14 to 45 days in which you can apply for as many mortgages as you want with a similar effect on the credit score. It will help you understand which lender’s terms are the best for you.
- Get Help of a Professional Remortgage Broker: Hiring a professional mortgage advisor can help you score a great remortgage deal. They work with all kinds of lenders and are experienced enough to guide you with a solid and reliable mortgage plan.
Remortgaging is an excellent option if you are spending an extravagant amount on your current home mortgage interest rates. Just ensure that you don’t blindly trust your realtor, bank, or mortgage broker and do thorough research before investing in a new remortgage deal. Zinga Mortgages are reliable mortgage brokers in London that can properly guide you in your case and provide the best remortgage rates on your home mortgage.