Remortgaging can be a great opportunity to save money on your mortgage payments, release equity, or find a deal that better suits your current financial situation. Whether your fixed-rate period is coming to an end or you’re simply looking for a better deal, it’s important to approach the process carefully to ensure you get the best possible outcome.
Here are our top 5 tips for when it’s time to remortgage, including how working with a trusted mortgage broker can help you access deals that aren’t always promoted by banks and building societies.
1. Start the Process Early
One of the biggest mistakes homeowners make when remortgaging is leaving it too late. If your current mortgage deal is set to end, and you don’t arrange a new deal before that happens, you’ll likely be moved onto your lender’s Standard Variable Rate (SVR). This rate is usually much higher than the deal you’ve been on, meaning your monthly payments could increase significantly.
What to Do:
- Begin reviewing your mortgage options 3-6 months before your current deal ends. This gives you plenty of time to explore your options and avoid any nasty surprises when your fixed or discounted rate expires.
- Mark the end date of your current deal on your calendar and set reminders to begin the remortgage process well in advance.
Tip: Use a Broker for a Head Start
A mortgage broker can keep track of your current deal’s end date and help you start the process early, ensuring that you have plenty of time to secure a better rate.
2. Check Your Credit Score
Your credit score plays a big role in the mortgage deals available to you, especially if your circumstances have changed since you first took out your mortgage. Lenders use your credit history to assess your ability to make repayments, and a stronger credit score can help you qualify for better deals.
What to Do:
- Check your credit score with agencies such as Experian, Equifax, or TransUnion to see where you stand. If your score has improved, you could be eligible for lower interest rates.
- If your score has dropped, take steps to improve it by paying off existing debts, avoiding taking out new credit, and ensuring all payments are made on time.
Tip: Brokers Understand Your Circumstances
A trusted mortgage broker can assess your situation holistically and recommend lenders that are more flexible with credit histories. They can also help you improve your application to get better rates.
3. Compare Deals Beyond Your Current Lender
While your existing lender might offer a convenient deal when it’s time to remortgage, it’s important to shop around. Other lenders may offer much more competitive rates or better terms that could save you hundreds, if not thousands, of pounds over the lifetime of the mortgage.
What to Do:
- Research deals from a wide range of lenders, including smaller building societies that may offer exclusive remortgage deals.
- Don’t just look at the interest rate – factor in arrangement fees, early repayment charges, and other costs associated with the new mortgage.
Tip: Access to Exclusive Deals
A mortgage broker often has access to exclusive remortgage deals that banks and building societies won’t always promote to the general public. These can include lower rates or terms tailored specifically to your needs. By working with a broker, you can gain access to these hidden gems that may not be available through direct applications.
4. Consider Your Long-Term Financial Goals
When remortgaging, it’s important to think about more than just the monthly payments. Consider your long-term financial goals and how your mortgage fits into them. For instance, do you plan to move in the next few years, or do you want stability in your payments over a longer period? Are you looking to release equity for renovations or other financial projects?
What to Do:
- Choose between a fixed-rate mortgage, which offers stable payments over a set period, and a tracker mortgage, where your interest rate will move in line with the Bank of England’s base rate.
- If you’re planning to stay in your property long-term, a fixed-rate deal might provide peace of mind, while a tracker mortgage could suit those who expect interest rates to remain low for a while.
- If you want to release equity, consider how much you need and whether remortgaging is the best option for your financial situation.
Tip: Tailored Advice from a Broker
A mortgage broker can help you assess the best remortgage options based on your personal and financial goals. They’ll take the time to understand what you’re aiming for and guide you towards products that match your long-term plans.
5. Don’t Forget Fees and Costs
It’s easy to focus solely on the interest rate when comparing remortgage deals, but the overall cost of the mortgage includes fees that can quickly add up. These can include arrangement fees, valuation fees, and legal costs. Sometimes, a deal with a slightly higher interest rate but lower fees could end up being cheaper in the long run.
What to Do:
- Always factor in all fees when comparing mortgage deals. Many lenders charge an arrangement fee (sometimes called a product fee) that can range from £500 to £2,000, and this can affect the overall cost of your mortgage.
- Look out for deals that offer free valuations or free legal work, as these can significantly reduce your upfront costs.
Tip: Brokers Can Help You Cut Through the Noise
A mortgage broker will not only compare interest rates but also factor in all associated fees, helping you choose the deal that provides the best value for your specific circumstances. Brokers are experienced in balancing the overall costs to make sure you don’t fall into the trap of focusing solely on the headline rate.
Remortgaging is an opportunity to save money and find a mortgage deal that better suits your life and finances. But navigating the various deals on offer, understanding the fees, and considering your long-term goals can be overwhelming. This is where working with a trusted mortgage broker can make all the difference.
A broker has access to a wide range of lenders and exclusive deals that aren’t available to the general public. They can help you find tailored solutions and guide you through the remortgage process with expert advice. In many cases, a broker can save you both time and money, ensuring that you get the best possible outcome for your circumstances.
So, when it’s time to remortgage, don’t hesitate to get in touch with a reputable broker who can help you access the hidden deals that banks and building societies won’t promote.
