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When can you remortgage? | YBS
When you remortgage will depend on what deal you have and if you want to switch to a new lender. Remortgaging normally happens when your current mortgage deal is coming to an end.
What is remortgaging?
Remortgaging means switching to a new mortgage deal with a different lender. Think of it in a similar way to when you switch energy providers.
When should I remortgage?
When you decide to remortgage is up to you. People may choose to remortgage when their current deal is coming to end and to avoid being put into their lenders Standard Variable Rate (SVR).
You may want to look into remortgaging two to six months ahead of your deal ending. This way, you might be able to avoid being placed onto a SVR mortgage.
There are lots of reasons that might affect the time you choose to remortgage:
You may want to look into remortgaging two to six months ahead of your deal ending. This way, you might be able to avoid being placed onto a SVR mortgage.
There are lots of reasons that might affect the time you choose to remortgage:
- Your home has risen in value – if your home is worth a lot more than you bought it, you might be able to get a lower LTV mortgage product.
- Your deal is ending – remortgaging to avoid going onto a lender’s SVR.
- You want to change the type of mortgage – if you are on a variable or fixed rate, you may want to swap to a different type of mortgage.
Why you might want to wait
There are also reasons you might not want to remortgage right now. Such as:- You are in negative equity – if you owe more on your mortgage than your home is worth, you might not be able to remortgage.
- You’re still in your current deal – if you have to pay an early repayment charge, this might be more expensive than you stand to save by switching.
How to get ready to remortgage
When the time comes, you’ll need to do a few simple actions before you are ready to remortgage.
Find out how much your property is worth
When thinking about remortgaging, you will need to have an idea of what your home is currently worth.
This is because your loan to value is likely to have changed since you took out your current mortgage. Your loan to value will affect the interest rates you are able to get from your remortgage.
You might be able to get an estimate of your home’s value online. Looking at what similar houses in the area have sold for can also help you to know what you home is worth.
This is only an estimate, however, a lender will carry out a valuation when you remortgage, which could differ.
This is because your loan to value is likely to have changed since you took out your current mortgage. Your loan to value will affect the interest rates you are able to get from your remortgage.
You might be able to get an estimate of your home’s value online. Looking at what similar houses in the area have sold for can also help you to know what you home is worth.
This is only an estimate, however, a lender will carry out a valuation when you remortgage, which could differ.
Find out how much you still owe on your mortgage
This will be the amount that you would be borrowing from the new lender on your remortgage. Ask your current lender for a redemption statement to find this out.
Remortgaging fees and charges
There might be costs to pay when you switch mortgage providers:
Product fee or arrangement fee
This is the cost of setting up or ‘arranging’ your mortgage. The product fee can either be paid on application or added to your loan.Adding to your loan will increase the overall cost of your mortgage, since you will pay interest on it.
Some remortgage products are offered with no product fees to pay, so be sure to check when you’re looking for a new deal.
