Did you know that your mortgage might ‘mature’ after the first few years? Many first-time homeowners are unaware that remortgaging can actually get them a better deal. If your mortgage matures, meaning that the initial deal has expired, you might be paying more than you need to.
Here’s a handy guide to remortgaging for first-time homeowners to break down the process and help you identify whether or not you should remortgage your home.
What is remortgaging?
Remortgaging is the process of replacing your existing mortgage with another. There are a number of reasons people remortgage their homes, including to borrow money against your property, to get a better deal than your current mortgage offers or because you are reaching the end of your existing rate.
Remortgaging is more common than you think, accounting for roughly a third of mortgages in the UK. There is no need to stick with your current lender – you can shop around for a better deal, just as you would for car insurance or phone contracts.
What happens when your current mortgage rate ends?
When you take out a mortage, you’ll often have a tracker, discount or fixed rate for a certain length of time. When this period is up, your mortgage will likely revert to a standard variable rate (SVR). Your lender will contact you to inform you of this change before your current mortgage rate expires.
Around six month before the end of your mortgage rate, you should speak to a mortgage adviser for expert guidance on your remortgaging options to get the best options available to you. Mortgage advisers will offer professional, independent advice to assess all the deals on the market and recommend the deal best suited to your individual circumstances.
If you choose to remortgage, your adviser will make the process simple and will even submit the application on your behalf.
Will remortgaging help you save money?
How much money you could save by remortgaging varies depending upon your individual circumstances.
However, it’s important to consider costs of switching lender, such as exit fees and early repayment charges, when assessing if you could be better off.
Your mortgage adviser will analyse all these costs with an experienced eye to give you a clear idea of what remortgaging will look like for your finances. If we think you’d be better off staying with your existing lender then will advise you to do this and even complete the process for you.
Why do first-time homeowners remortgage?
Here are some of the top reasons first-time homeowners remortgage:
- Property has increased in value – if your property has increased in value since you bought it, you could remortgage for lower rates.
- To borrow more money – if you want to borrow more money on top of what you currently owe for your mortgage, you can ask your current lender or remortgage for better borrowing rates.
- For fixed interest rates – if you’d like economic stability, you can remortgage for a deal that offers fixed interest rates.
- To overpay on your mortgage – if you’d like to pay more on your mortgage to reduce interest and pay it sooner, you can switch to a mortgage that gives you the option to overpay if your current one doesn’t.
Choice Mortgage Solutions offer independent advice to help you decide whether it’s in your best interests to remortgage. Our mortgage professionals have access to deals that aren’t available on the high street, so they’ll be able to analyse all deals and recommend the best ones for your circumstances.
To book a free initial consultation, get in touch with the Choice team today.