REMORTGAGES
Remortgaging advice in Newcastle
When can I remortgage?
If your mortgage deal has expired, then you are probably paying more than you need to for your monthly mortgage repayments as you will have probably reverted to the lender's higher standard variable rate (SVR). In this scenario, you will save money on your monthly mortgage payments if you remortgage.
Similarly, if the mortgage rates drop and you are stuck with a deal paying higher monthly repayments, then it may be worth investigating whether remortgaging is a viable option. You may be financially better off paying the exit fee from your existing mortgage deal and financing a cheaper deal. However, after benefitting from low lending rates over the last few years, this scenario is unlikely to affect many people.
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If you want to remortgage, you could save hundreds or even thousands of pounds per year on your mortgage repayments. Why not make an appointment with one of our advisers and get the ball rolling. If you already have a mortgage, we might be able to help you get a cheaper deal from a different lender and save you some money.
Can you remortgage early?
Can you remortgage early?
Some of the lenders may contribute towards the costs when you switch your mortgage, however, as a general rule it is normally better to wait until your current deal has nearly expired.
Whatever your situation feel free to contact one of our professional mortgage brokers on 07789 900359 for some advice or send an email to info@pendafm.co.uk.
You could save hundreds or even thousands per year on your repayments.
Book an appointment with one of our friendly advisers and get the ball rolling.
Reasons for looking for new remortgage deals
Home improvements
It can be cheaper and easier to extend or improve your home rather than moving. If you need to raise funds for an extension or a new kitchen, remortgaging could be the answer.
Reducing your monthly mortgage repayments
You might be paying your lender’s Standard Variable Rate (SVR), or are coming to the end of your fixed rate or tracker deal. If so, we can research to see if we can find you a better deal, with a lower interest rate than your current lender. This may apply to your own property or one of your buy to let properties.
To raise money
Aside from wanting to make home improvements, you may also need to raise money for a car, a wedding or a child’s university costs. It may be cheaper to remortgage and increase the mortgage amount than to take out a separate loan.
You need a deposit for a buy-to-let investment
You might be considering purchasing a property to rent out, but are short of the funds to provide the deposit for the rental property. If so, we can assess whether this would be a viable option.
Debt consolidation
You may want to reduce your monthly outgoings and consolidate your debts into one, more affordable payment. You can do this by using equity in your home to pay off your debts. We can review your current finances and find a suitable solution.
To meet a shortfall in an endowment policy
Instead of increasing your savings or investment contributions you may find that switching all or part of your borrowing to a repayment mortgage is a better way to meet any endowment shortfall.
Buying a new home
Remortgaging also occurs when a homeowner just like you moves home and purchases a new one.
Use a trusted adviser to find the best deal
At Penda we have access to virtually the whole of the market and we have exclusive deals with some of the lenders, so you know you will be getting a good deal.
Our mortgage brokers are qualified and trustworthy.
We will remove any confusion and eliminate the stress as we guide you through the process.
All of the paperwork is taken care of by us and we stay in touch with the lenders until completion.
We will keep you updated every step of the way so you can go about your normal daily routine.
If you’d like any further information, or you’d like to talk things over with a mortgage adviser, contact us 07789 900359.
For more information on some related topics feel free to click on one of the links provided below, or scroll down for further information on what we have to offer you.
Remortgaging options to consider
An introductory rate is often the norm for your first mortgage application. However, this discounted price only runs for a certain length of time, typically 2 - 5 years. After that period ends you will revert to the lender's standard variable rate (SVR), and this is the time you need to consider remortgaging, ideally just before the end of the offer.
You may choose a discounted deal with a discount offered on the provider's standard variable rate for a defined period. For example, if the SVR is 3%, your discounted offer could be 2% for three years.
If money is tight, you could opt for a fixed rate deal which provides a set interest rate for a specified period. In this scenario, you keep control of your mortgage repayments, even if the bank's SVR rises.
Tracker mortgage deals are another alternative. The mortgage lending rates for trackers follow the Bank of England (B.o.E) base rate. The base rate is usually topped by a set percentage, for example, a 3% rate on top of the current base rate (0.50%), totaling 3.50%.
Another type of deal to consider is the capped mortgage deal. As the term implies, it means that your mortgage lending rates will not go higher or lower than an agreed level.
You may choose a discounted deal with a discount offered on the provider's standard variable rate for a defined period. For example, if the SVR is 3%, your discounted offer could be 2% for three years.
If money is tight, you could opt for a fixed rate deal which provides a set interest rate for a specified period. In this scenario, you keep control of your mortgage repayments, even if the bank's SVR rises.
Tracker mortgage deals are another alternative. The mortgage lending rates for trackers follow the Bank of England (B.o.E) base rate. The base rate is usually topped by a set percentage, for example, a 3% rate on top of the current base rate (0.50%), totaling 3.50%.
Another type of deal to consider is the capped mortgage deal. As the term implies, it means that your mortgage lending rates will not go higher or lower than an agreed level.
What to do after the current deal ends
If you want another mortgage deal, you are free to change whenever you want provided that you are not locked into your current contract as there will probably be an exit fee to pay. You can switch to a new mortgage lender or change from a standard variable rate for a better offer from your current provider.
Your annual savings could reach up to some thousands of pounds.
If you have equity in your property, it is always beneficial to pay less than your lender's standard variable rate as you will save money.
The most competitive remortgaging deals are usually only available to those with at least 25% equity. Ideally, your mortgage must be less than 75% of the value of the property, or loan to value (LTV). For example, if your house is worth £200,000 and you need to a mortgage for £100,000, your equity should be 50%. However, if your capital is less than 25%, you can still get a better mortgage deal. Difficulties only tend to arise when you are in negative equity, or your financial circumstances have changed.
Be aware that if you are currently tied to a discounted, fixed or capped deal, and not on a standard variable rate, leaving your existing agreement might cost you money as you may have to pay an exit fee. The cost of this exit penalty, combined with the new mortgage arrangement fees, may wipe out any potential savings from the low mortgage repayments linked to a new deal. In this scenario, remortgaging would be pointless.
Before remortgaging all potential additional fees should be considered, such as valuation, property survey, and application fees. Will your lower monthly repayments offset these costs?
And if you wish to move home, you need to know first if your lender would be willing to lend you the additional money if you are moving to a more substantial more expensive residence.
Your annual savings could reach up to some thousands of pounds.
If you have equity in your property, it is always beneficial to pay less than your lender's standard variable rate as you will save money.
The most competitive remortgaging deals are usually only available to those with at least 25% equity. Ideally, your mortgage must be less than 75% of the value of the property, or loan to value (LTV). For example, if your house is worth £200,000 and you need to a mortgage for £100,000, your equity should be 50%. However, if your capital is less than 25%, you can still get a better mortgage deal. Difficulties only tend to arise when you are in negative equity, or your financial circumstances have changed.
Be aware that if you are currently tied to a discounted, fixed or capped deal, and not on a standard variable rate, leaving your existing agreement might cost you money as you may have to pay an exit fee. The cost of this exit penalty, combined with the new mortgage arrangement fees, may wipe out any potential savings from the low mortgage repayments linked to a new deal. In this scenario, remortgaging would be pointless.
Before remortgaging all potential additional fees should be considered, such as valuation, property survey, and application fees. Will your lower monthly repayments offset these costs?
And if you wish to move home, you need to know first if your lender would be willing to lend you the additional money if you are moving to a more substantial more expensive residence.
If you are not sure about remortgaging options, talk to a mortgage broker at Penda. We will give you advice on whether to move to a new mortgage or stay with your existing lender. And if you are looking for a new provider, we have access to virtually the whole of the market and have exclusive deals with some of the providers.
Remortgage deals we advise on
Fixed Rate Mortgages
Fixed rate mortgages promise predictable monthly mortgage payments for an agreed duration of time. Your mortgage lending rate is frozen, so you know how much you'll pay on a monthly basis. And your repayments will stay the same throughout the deal.
The fixed rates apply for periods ranging between two and ten years, depending on which deal you choose. So if interest rates rise during this time, you will be protected from any increases in your mortgage repayments.
Capped Rate Mortgages
Unlike the fixed-rate mortgages, the interest rates in a capped rate mortgage can rise or fall but only within certain limits defined in the mortgage agreement. However, the interest rates are often slightly higher than the equivalent fixed rate mortgages, and you have no control over the B.o.E's base rate so repayments may increase in the future if this rises. In effect, they are a specialised type of variable rate mortgage.
Discounted Mortgages
Discounted mortgages have variable rates as well. You will save money on your monthly mortgage repayments during the discounted period, as the lender will offer a lending rate below their standard variable rate. When the deal ends, you will revert to their SVR lending rate. The difference between discounted and capped mortgages is that there is no ceiling or limit for discounted mortgages.
Tracker Mortgages
Trackers are another type of variable rate mortgage. These typically track the Bank of England base rate. If the base rate increases, then your monthly repayments will also increase. On the other hand, if the base rate decreases, then your loan repayments will decrease.
A tracker deal is typically 2.5% above the current B.o.E. base rate, so your lending rate, or SVR, would be 3.0%. However, if you have equity in your property, you may be able to secure an even better deal than that nowadays.
Offset Mortgages
An offset mortgage is taken out to lower the interest repayments on the mortgage. To achieve this, you need to link your savings to your mortgage. Your savings will offset the interest chargeable on the total amount borrowed.
For example, if you borrowed £120,000 and your savings are worth £50,000, then the mortgage interest will be only against the £70,000 instead of the whole amount.
The mortgage rates offered may be slightly higher than those provided for a standard mortgage. However, if you have substantial savings, the effect of the offset is lower interest repayments and early completion of your mortgage.
To facilitate this your mortgage and your savings accounts must be lodged with the same provider.
Fixed rate mortgages promise predictable monthly mortgage payments for an agreed duration of time. Your mortgage lending rate is frozen, so you know how much you'll pay on a monthly basis. And your repayments will stay the same throughout the deal.
The fixed rates apply for periods ranging between two and ten years, depending on which deal you choose. So if interest rates rise during this time, you will be protected from any increases in your mortgage repayments.
Capped Rate Mortgages
Unlike the fixed-rate mortgages, the interest rates in a capped rate mortgage can rise or fall but only within certain limits defined in the mortgage agreement. However, the interest rates are often slightly higher than the equivalent fixed rate mortgages, and you have no control over the B.o.E's base rate so repayments may increase in the future if this rises. In effect, they are a specialised type of variable rate mortgage.
Discounted Mortgages
Discounted mortgages have variable rates as well. You will save money on your monthly mortgage repayments during the discounted period, as the lender will offer a lending rate below their standard variable rate. When the deal ends, you will revert to their SVR lending rate. The difference between discounted and capped mortgages is that there is no ceiling or limit for discounted mortgages.
Tracker Mortgages
Trackers are another type of variable rate mortgage. These typically track the Bank of England base rate. If the base rate increases, then your monthly repayments will also increase. On the other hand, if the base rate decreases, then your loan repayments will decrease.
A tracker deal is typically 2.5% above the current B.o.E. base rate, so your lending rate, or SVR, would be 3.0%. However, if you have equity in your property, you may be able to secure an even better deal than that nowadays.
Offset Mortgages
An offset mortgage is taken out to lower the interest repayments on the mortgage. To achieve this, you need to link your savings to your mortgage. Your savings will offset the interest chargeable on the total amount borrowed.
For example, if you borrowed £120,000 and your savings are worth £50,000, then the mortgage interest will be only against the £70,000 instead of the whole amount.
The mortgage rates offered may be slightly higher than those provided for a standard mortgage. However, if you have substantial savings, the effect of the offset is lower interest repayments and early completion of your mortgage.
To facilitate this your mortgage and your savings accounts must be lodged with the same provider.
Potential savings versus the costs
Make sure that you factor in the arrangement fees associated with your new mortgage and know how much you need to pay before accepting a deal. In the UK this is typically £1,000, but it can be higher or lower. Other fees to consider include valuation costs and legal fees. If possible try and find ones that do not charge for these.
In most cases, you will make significant savings when remortgaging, and it will far outweigh all the other costs involved in the process. For example, if you are paying a standard variable rate (SVR) of 4.41% on a £150,000 mortgage and you switch to a fixed rate deal with a lending rate of 1.66% for two years you could save over £2,000, even allowing for an arrangement fee of £1,000.
Preparing for a new mortgage application
Try and ensure that you have a good credit record when you apply for another mortgage. Check your credit rating and if there are any issues, try and resolve them. Have you missed any mortgage repayments in or defaulted on a loan recently? Do you have an unpaid utility bill or credit card bill?
You will still need to prove your earnings so make sure you have bank statements, any details of credit arrangements or loans and proof of income (pay slips, P60, etc.). If you are self-employed, ensure you have your accounts for the last three years. Remember to bring along some proof of identity (passport and driver's licence). So be prepared.
Make an appointment with one of our mortgage brokers or financial advisers and we will guide you through the process and find the remortgage option most suited to you and your current circumstances. Call Penda on 07789 900359.
You will still need to prove your earnings so make sure you have bank statements, any details of credit arrangements or loans and proof of income (pay slips, P60, etc.). If you are self-employed, ensure you have your accounts for the last three years. Remember to bring along some proof of identity (passport and driver's licence). So be prepared.
Make an appointment with one of our mortgage brokers or financial advisers and we will guide you through the process and find the remortgage option most suited to you and your current circumstances. Call Penda on 07789 900359.
All financial advice is given by Penda Financial Management Ltd for advising on and arranging mortgages, insurance and personal investments. Your home could be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Penda Financial Management is authorised and regulated by the Financial Conduct Authority FCA No.504162. Registered Office:
Penda Financial Management
136 - 138 Station Road, Wallsend
, Newcastle upon Tyne
, Tyne and Wear
, NE28 8QT. Phone: 07789 900359
Registered in England. Company Registration no: 5407010.