Remortgaging
The
Basics
Becoming increasingly popular over the last ten
years remortgaging is commonplace in today's competitive
mortgage market. Lenders are constantly providing
new ways for borrowers to save money if they switch
their mortgage from their existing lender to a new
one.
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 penalties 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 redemption penalties will you incur if
you were to pay off your mortgage early? Are
any other fees involved?
It is also generally worthwhile letting us talk
to your existing lender to look at opportunities
for obtaining better rates without moving the actual
loan. How
we can Help
Obviously prior to making any decisions comparisons
from other providers should be obtained. The Best
Choice UK panel of advisors 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 mortgage indemnity to pay? (Mortgage
Indemnity 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. Best Choice UK Ltd
is independent of its advisor panel who will be
able to help discuss the options with you, answer
any questions you might have and agree a course
of appropriate action. 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 a redemption
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.
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