So you have already gone through the first time buyer process. By now you probably realise that your mortgage is probably your biggest outgoing, so to save money, you might consider remortgaging your home. This is the process of moving your current mortgage to a new lender or entering into a different deal with your current lender. It makes sense to do so, as if you can move to a better interest rate or deal, you will reduce this monthly expense. In this guide, we will break down your mortgage renewal options.
Is remortgaging a good idea?
How does remortgaging work? Remortgaging to a better rate usually makes financial sense to do so. Having the best available rate is important but there may also be other reasons to remortgage your home.
You could use a re-mortgage to release extra cash for home improvements. So, let’s say you wanted to build an extension, convert an existing part of your property, or carry out other projects. If it improved the value of your property, it could mean you can borrow more money when remortgaging.
You may consider remortgaging to consolidate debt, as you would then be able to raise the money to pay off your credit cards and existing short-term loans. These would be replaced by the monthly payments you would make on your new mortgage.
And if you were wanting to start a business or buy a second property, you could also re-mortgage to release the equity tied up in your current property. Speak to a mortgage advisor about the amount of equity in your property and the options for your available equity.
So, no matter your reason for remortgaging your house, be it to release equity, benefit from reduced interest rates, make home improvements, or something else besides, you should give it some consideration. Here at YesCanDo, we can offer you fee free remortgage advice that you can trust, so get in touch with us using the contact details on our website. Our aim is to guide you, save you money and help you achieve your best mortgage. We make sure that you always fully understand all of your available options and that you NEVER pay more than you need too.
Should You Remortgage Your Home Now?
Table of Contents
Remortgaging in 2021: Bank of England base rate cut
You can remortgage your home at any time, but if you have been considering the possibility of doing so, now could be a perfect time. In 2020, the Bank of England made emergency interest rate cuts to the base rate to reduce the economic impact of the Coronavirus. The emergency interest rate cut is only a temporary measure, although as we are still in the midst of the pandemic, the BOE is unlikely to raise interest rates again soon but a higher interest rate will return in the coming years.
As interest rates are currently at a historic low, this could mean that it’s the best time to remortgage your property. The best-fixed rate mortgage deals often disappear when there is an inkling that the BOE might increase their interest rates, so you should take advantage of any mortgage deals now. By speaking to a mortgage adviser, you will be given mortgage advice you need to make the right decision. So, get in touch with us. We will give you advice on the best remortgage deal for you and will answer any questions you have about the process.
Worried That You Won’t Be Able To Remortgage Your Home?
Applying for a remortgage
Now might be the right time to remortgage your home, but if you think your personal circumstances are unusual, you might have worries about your application. Will your lender accept it, or will you be turned down?
Thankfully, most mortgages lenders will consider an application. As happened when you first took out a mortgage, they will assess your ability to make the repayments. If you have kept up with your payment schedule, your current lender should consider your application to remortgage, and so should any new lender.
Still, even if you have been able to make your current mortgage payments, you might still have doubts about your application being accepted. You might be worried that your personal circumstances will make you exempt from any new mortgages, or you may have fallen prey to myths that suggest your application will be turned down.
Let’s take a look at some common questions our customers have, and these will indicate your eligibility for remortgaging your home.
Can I remortgage for free?
The reason most people remortgage is to save money, therefore, how much can you expect to spend on remortgaging and is the overall value worth it? Is it even possible to remortgage at no cost at all?
It is possible to remortgage for free! You will be able to re-mortgage to a better interest rate and save money on your monthly mortgage payments for no cost at all. Slipping onto a standard variable rate (SVR) is a massively higher interest rate and never usually makes financial sense to do so. It usually makes sense to get a fresh rate/deal and renew your mortgage back to one of the many competitive fixed rate mortgages.
Learn the different product fees and exit fees that you can expect to pay when you come to re-mortgage. We will show you a way that you can remortgage for free here!
As of January 2021, the average standard variable rate is 4.90% which is more than twice the average fixed rate. Before fixed-rate mortgages come to end you will need to know exactly what date the rate will switch to fall onto a standard variable rate. Read more about how avoiding standard variable rates (SVR) can save you money here.
Can I remortgage if I no longer have a mortgage on my home?
If you no longer have any outstanding mortgages on your property, you own 100% of the equity in your house. Lenders will consider your home an ‘unencumbered property,’ and they will have slightly different rules if you want to remortgage your property. The mortgages and the deals they offer you will depend on how much you want to borrow, and they will be taken as a percentage of the current value of the property. This is known as the loan to value ratio. In some cases, you may get a better rate on your mortgage deal, as the lender may offer you their purchase rates instead of their remortgage rates. This depends on the value of the property and your financial situation. We can discuss all of this with you, so talk to one of our mortgage advisors for further fee free mortgage advice.
Can I remortgage if I am self-employed?
The short answer is yes, but you may struggle to find a lender willing to give you a remortgage deal. This is because you will need to prove you have the financial ability to make the repayments. If you have been self-employed for a number of years and have audited accounts to prove you have a steady income, you should be in with a chance. However, if you are newly self-employed and/or don’t have the ability to prove your earnings to make back the repayments, you might have trouble convincing a lender to approve your application. If you’re self-employed, get in touch with us before making your application and we will advise you further.
Can I remortgage when I am retired?
Some mortgage lenders will be happy to give you a mortgage after you have retired, but others will think twice about it. It will get more difficult the older you become, and if you no longer have any earnings coming in, your application may get turned down. Talk to one of our mortgage advisors as we will talk through your available options with you.
Can I remortgage during my existing fixed term?
Yes, you can. but it is not always in your best interests to do so. You may be liable to pay an early repayment charge if you leave your existing mortgage fixed term, so it may be in your best interest to wait until your mortgage deal expires. Speak an expert on mortgages. YesCanDo money: One of our mortgage advisors to avoid early repayment mortgage charges.
Early Repayment Charges: What happens if you remortgage too early?
It is important that you do not complete too early. When you took out your existing mortgage you will have been provided with a mortgage offer. On the offer, it will have a date that your existing fixed-rate or tracker rate ends. It is imperative that you do not complete before this date. If you do complete before this date you will get charges known as an early redemption charge.
On your existing fixed rate mortgage offer, it will show exactly how much the early redemption charge will be. If you complete before this date you will be charged this amount. To give you an idea of how much this could be, most lenders will charge 3% of the mortgage. Therefore, on a £150,000 mortgage, the amount would be £4,500. A costly fine for completing your remortgage early, unless the overall value makes financial sense to do so for your current situation.
Can I remortgage my shared ownership home?
You probably will be able to re-mortgage your shared ownership home, but you will need a lender that offers customers shared ownership mortgages. Some will have specific shared ownership rates, so it pays to shop around. A mortgage adviser from our team can offer advice on where to look for a shared ownership mortgage, so get in touch.
Can I remortgage if my home is in negative equity?
A home is in negative equity if the value of the property value is worth less than the size of the mortgage. This is usually caused by falling house prices. It might be that a lender will offer you a retention product, wherein they approve a mortgage rate/deal, but don’t release all of the funds until the negative equity has been reduced. Our experts on mortgages can give you further advice on this matter.
Can I remortgage if I am on maternity leave?
Yes, but it depends on the lender’s policy. Some will need to write to your employer to confirm your return to work date and salary details, and some will require proof of your savings to cover your maternity period. Lenders will often require your return to work date to be with 2-3 months of the start date of your new mortgage, so timing might be everything when it comes to your application. Our specialist advisers can advise you further, so get in touch for the best mortgage advice.
Can I remortgage if I am about to change jobs?
It is sometimes possible, although you might need to meet certain criteria. Some lenders will require you to start your new job within the first few months of your new mortgage, for example. In some cases, it might be beneficial to wait to re-mortgage until you are in your new job. Speak to experts on mortgages like our own UK online mortgage advisers for advice specific to your situation.
Can I remortgage while I’m still in the probation period in a new job?
Some lenders won’t offer you a mortgage while you’re still in the probation period, while others will be willing to consider your individual case. It might be best to wait until your job is officially permanent, but speak to us, as you might still be able to remortgage your house while you’re on your probation period.
Can I remortgage using Disability Living Allowance?
If you or your partner are on Disability Living Allowance, you might be able to use it when remortgaging your house. However, some lenders will only use it if it isn’t your only source of income, while others will only allow it if your DLA is guaranteed for the entire term of your mortgage. There may be other stipulations too but talk to one of our mortgage advisers, as we can discuss and support your individual case.
Can I remortgage using Working Families Tax Credit or Child Tax Credit?
Usually yes, but lenders will have different policies regarding how much you can borrow. There are also certain criteria you will have to meet, such as evidence that your payments are set to continue. If your payments are due to stop, or if your children are over 14, your application may be turned down. If your application is accepted, certain lenders will take 100% of both forms of tax credit while others will only take 50%. Your situation may change to what you might want depending on lenders critira. We can explain more about the criteria you may have to meet, so get in touch with us.
Can I remortgage if I am unemployed?
In some cases, yes, but you will have fewer mortgage deals to choose from. You may have difficulty switching to a new lender, so might want to switch to a new deal with your current mortgage provider. Remortgaging while unemployed can be tricky but speak to one of our advisors for information regarding the situation you’re in and your available options.
Can I remortgage using my maintenance payments?
So you want to remortgage using maintenance payments? If you meet certain criteria, such as evidence that they are via a court order and proof through your bank statements, then yes, you may be able to re-mortgage using your maintenance payments. Mortgage lenders will usually take a percentage of your payments, from 50% to 100%, so it is worth talking to a variety of lenders before making an application. We can offer you fee free mortgage guidance, so speak to us if you’re intending to use your maintenance payments.
Can I remortgage to raise capital to buy somebody else out of my property?
Yes. Some providers will lend up to 90% loan to value LTV while others will limit you to 80% loan to value LTV. You will need to prove that your sole income will be enough to cover the mortgage repayments, however. WhatsApp YesCanDo to find out if this will be possible for you, either way, we may be able to help you find an appropriate alternative lender.
How much could I borrow if I added it to my mortgage?
The mortgage lender will make a decision based on two factors. Firstly your income and secondly the overall loan to value (LTV). The lender will want to see your last 3 months payslips to enable them to work out your borrowing capacity. Most lenders will be able to calculate the value of your property by carrying out a desktop valuation. The lender will want to know the reason for releasing extra funds. If you are raising for home improvements then they may lend you more than if you were planning on paying or credit cards or other debts.
Can I remortgage a recently purchased property?
Some lenders will let you remortgage from day one, although others will stipulate that you have to live in the property for at least six months. Again, shop around until you find somebody who will let you remortgage, and contact us, as we may be able to help source the appropriate lender.
Can I remortgage a help-to-buy mortgage?
A handful of lenders will let you do this, though they will probably restrict the loan to value. You might find that other lenders will turn your application down. However, get in touch with us before you submit an application to a lender, as we will be able to advise you further. We can research lenders that will fit your loan to value and affordability. We do it all for free!
Can I remortgage a buy-to-let?
Yes, but lenders will typically need the rental income to be between 125% to 145% of the monthly mortgage payments. Some lenders will also require you to earn a separate income to your rental income. Contact us for more information on the necessary steps needed when remortgaging a buy-to-let.
Can I remortgage if I am on a fixed-term contract?
As with a self-employed borrower, the lender will need to see that you have the financial stability to meet the repayments. They might also look at your track record of earning, and they might need to know that your contract will be renewed. If they are happy with the answers they receive from you, you should be able to remortgage while being on a fixed-term contract.
Can I remortgage if I am an agency worker or on a temporary contract?
It can be hard to get a new mortgage with traditional high street lenders, although there are specialist lenders who will accept applications from agency and temporary contract workers. Be it with your current lender or a new one, you may need to provide evidence of twelve months of continuous employment. Get in touch and we will help you find the right mortgage provider for you.
Can I remortgage using my bonus income?
Lenders will generally use the two year average of your bonus payments when assessing your bonus income. They probably won’t count all of it, however, due to the inconsistent nature of this income type. If they do accept your bonus income, you can expect them to count 50% to 60% when assessing your remortgage application.
Will mortgages lenders take my nights, shift allowances and overtime into consideration?
When you apply for a mortgage each lender will look at your last 3 months payslips when taking any night shifts and overtime into consideration.
The main thing they are looking for is consistency across the 3 months vs the amount you earn. If the different allowances amount up to consistent income across the 3 payslips there is a good chance they will all be taken into consideration. As the different allowances can make up a significant part of a professional such as a nurses pay, it is often the case that you will need these to be used to enable you to get the mortgage amount you will need.
I have both employed and self-employed income. Will I be able to use both?
There are a handful of lenders that will consider both employed and self-employed income when working out how much they will lend you. It is slightly more complicated though, therefore it is best to speak to an expert on mortgages. Such as a free mortgage broker like ourselves who will be able to advise you.
Can I remortgage using the retained profit from my limited company?
If you are a 100% shareholder, then yes, this might be possible. However, a lot of lenders won’t consider retained profit, so you might struggle to find somebody to accept an application on this basis. Contact us, as we will be able to investigate your available options.
Can I remortgage if I am on a zero-hours contract?
This is a tricky one, as it depends on your track record with your employer. If you have been with them for a long time, and you have evidence of continued earnings, then yes it might be possible. However, as you might not be guaranteed a minimum number of hours each week, there are those lenders who might decide against giving you a mortgage renewal. Ultimately, it will often depend on your individual circumstances, so get in touch, and we will look at your personal situation with you.
Can I remortgage on interest only?
There should be options available, but it will depend on your ability to repay the interest, the equity you have on your property, and your loan to value ratio. Contact us for further advice as we will be able to go through your options with you.
Can I remortgage before my current deal ends?
Yes, but as we suggested earlier, you may have to pay a penalty for leaving early. However, if you know the interest rate on your loan is due to increase, you might want to get out of it as soon as possible. If you are looking for another mortgage before your current deal expires, shop around for offers with better interest rates. However, if you choose to remain with your current deal, you can apply for a re-mortgage 6 months before the end date. While you wouldn’t be able to benefit from it straight away if accepted, you could still plan ahead. So, if you were planning on a few home improvements, for example, you could still book a builder and arrange for him to carry out your home project after the date your new mortgage starts.
Can I remortgage if I have solar panels on my house?
Lenders are generally happy to consider applications from those who have solar panels on their homes, but it can sometimes depend on the circumstances. If you purchased the solar panels outright, the lender will see fewer associated risks. However, if you are renting them, it might depend on what is written in your lease agreement. Speak to your lender to find out more, and get in touch with us for more information.
Can I remortgage to fund solar panels for my house?
Yes, as with any home improvement, you can remortgage to purchase the solar panels in full. You would need to factor in the upkeep of them into your calculations, so be sure to budget your finances in advance.
When Should I Not Consider Remortgaging?
As you can see, it should be possible to remortgage your house, no matter your circumstances. However, in some cases, it might be more cost-effective to wait until your current deal is up. We have already discussed the early repayment charges, but you may have to factor in legal, conveyancing, and survey fees too. As we discussed earlier, you might also want to improve your credit score before remortgaging, as you would then have access to better mortgage rates and deals. And if you can’t find a better interest rate, then clearly it pays to wait until interest rates drop.
What To Consider When Deciding To Remortgage?
For one, you need to consider your ability to pay. You will have a new monthly payment to make when you decide to remortgage, so you need to be able to afford it. There are mortgage calculators online, so use them when finding out how much a new deal will cost you. You also need to consider the type of mortgage you remortgage too. After all, you will need to ensure that you have the right product for your needs, be it on a fixed rate or a variable rate.
For free advice, get in touch with our mortgage experts via our website. We will help you find the best lender and product for you, so talk to us today for professional support and advice.
How quickly can I remortgage a property?
Timescales of a remortgage
The average time a remortgage takes is eight weeks. Although it is very possible to complete a remortgage in as little as 4 weeks. The more organised you are with your paperwork the quicker the re-mortgage will be. Remortgaging now is a great time to not only grab a historically low-interest rate but also it is a superb time to sort out your finances. In this guide, we will show the quickest and most efficient way to remortgage whilst avoiding an early repayment charge as well as a few tips on getting the lowest rates and best deal at no cost!
Can I release equity from my home?
Equity release: Releasing equity from your property
If you have an income it is very likely that you will be able to release equity from your home. It will be age-dependent and also depend on how much income you have and how much you want to release.
The chances are that your property has increased in value since you bought it, Maybe you want to take advantage of this and release some equity. In this guide, we will set out several reasons you may want to free equity from your home. We will provide you with valuable information as well as tips and ideas on how this can be achieved. Read the full guide linked below.
What is the best remortgage rate?
You are looking to remortgage and want to know how you can get the best interest rates? With the Bank of England base rate being at a historic low, why not speak to a mortgage advisor about your options? There are over 14,000 mortgages available in the UK from around 90+ lenders. We will whittle these down to find the perfect overall deal for you and your property situation.
Your best available re-mortgage rate will change on a daily basis as the mortgage lenders change their interest rates almost every single day. However, with the help of a fee free mortgage broker who has access to the whole market, you will be able to find and secure the most perfect available interest rate for you.
Why do some mortgages have arrangement fees and are they worth it?
When applying for a mortgage this question is often asked and the answer is not straight forward. However, if the mortgage you are applying for is over £150,000 the answer is usually yes.
Speak to us about your individual situation and we will search all deals to save you money. Read the full guide linked below.
Are mortgage brokers regulated?
Financial Conduct Authority (FCA)
YesCanDo money is a trading name of Roberts Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority, authorisation number 527815. Your home may be repossessed if you do not keep up repayments on your mortgage.
Registered office address (registered in England)
69 Broadmarsh Business Centre, Harts Farm Way, Havant, England, PO9 1HS
How to complain to the financial ombudsman service
Bringing a complaint to the financial ombudsman is straightforward and won’t cost you anything. Find out more about their process in making a complaint.