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A beginner’s guide to remortgaging

A beginner’s guide to remortgaging

What is remortgaging?

Remortgaging is the process of switching a mortgage to a different lender without moving homes. For many borrowers, it is also the ideal opportunity to review their personal and financial circumstances and to consider whether their current mortgage and lender is the most suitable for them.

What are common reasons to remortgage?

· Your mortgage deal has already come to an end and you have been placed on your lender’s standard variable rate (SVR)
· Your existing deal is nearing its end and you will soon be placed on your lender’s SVR · Reduce monthly repayments and gain extra flexibility on your mortgage term
· Borrow more money, possibly for home improvements or to pay off other debts
· Release equity from your home
· The value of your home has increased substantially
· Ensure your mortgage meets your personal and financial needs
· To change to a different type of mortgage

What if you want to stay with your current lender?

If you wish to stay with the same lender when your current deal comes to an end, you can simply complete a product transfer. This means you will be placed on a new product with your existing lender.

Remortgage jargon

Bank of England Base Rate - A rate of interest that is set by the Bank of England. If the base rate rises and your mortgage has reverted to SVR then your mortgage payments are likely to increase.

Early repayment charges (ERCs) – Fees you may have to pay if you wish to leave your mortgage at a specific time, for example, during the period of the initial deal.

Fixed-rate mortgage - The initial period of the deal which is usually between one and ten years where the mortgage interest rate remains the same. As a result, you can be certain that you will be paying the same amount each month for your mortgage.

Standard Variable Rate (SVR) - A mortgage deal will usually revert to this interest rate when the initial mortgage deal comes to an end. The SVR is decided by the lender and your payments may increase or decrease depending on interest rate movements.

Tie-in period - The period of time that you are tied in to your mortgage deal. If you want to leave your mortgage deal during this time you will usually have to pay early repayment charges.

Tracker mortgage - mortgage where the interest rate tracks the Bank of England base rate or London Interbank Offered Rate (LIBOR), depending on the lender

You home could be repossessed if you do not keep up mortgage repayments on it

Source: Mortgage Intelligence

A fee of up to £499 may be charged depending on individual circumstances.  A typical fee is £249 and is payable on completion.

The Mortgage & Insurance Bureau was created in 2003 in order to meet increasing demand from clients for advice on the ever complex mortgage market.

Our typical clients are busy, successful people who demand a high level of service. They want to deal with professional, knowledgeable staff, who are experts in their field.

Since our launch, The Mortgage & Insurance Bureau has established itself as one of the Region’s leading mortgage brokers and has won numerous industry awards for our service and performance.

Our staff have decades of experience in the mortgage industry and there are few challenges we cannot meet.

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