So remortgaging can feel like a bit of a minefield. Should you stay with your existing bank or building society or look at moving to a new lender? Should you get a fixed rate mortgage or a tracker rate mortgage? Another equally important question to ask yourself is when its too late to remortgage? Because leaving it too late could cost you financially.
The right time to remortgage is 4-6 months before your existing mortgage rate ends. Start the remortgage too early you could get a large fine from your existing lender. Start your remortgage too late you could go onto your lender’s variable rate.
In this guide, we make sure you know the perfect time to remortgage and will also show you how you can save a few thousand pounds along the way!
When should you remortgage?
The best place to start is to by finding the current mortgage offer on your current mortgage deal. On the mortgage offer, you see the date when your existing fixed rate deal or tracker rate ends. The ideal time to start the ball rolling on getting a great new deal is 5 months before this date.
Will it be better for me to stay with my existing lender?
The chances that your existing mortgage lender will offer you the lowest interest rate available is very unlikely. With over 100 different banks and building societies and over 14,000 different new mortgage deals and rates available it makes total sense to shop around! Staying with your existing lender could cost you a small fortune.
At the end of your current deal, you will automatically be put onto the lender’s standard variable rate. The standard variable rate will be at a far higher rate and will mean a massive rise in your monthly repayments.
How do I find out which lender will offer me the best deal?
The easiest and most time-efficient way to get the best mortgage rates and deals is to find yourself a whole-of-market mortgage broker. A whole-of-market mortgage broker will be able to search every mortgage deal available to find the very best rates and deals, including what is offered by your existing lender!
How do I find a whole-of-market mortgage broker?
Ask your friends who have recently moved home or have remortgaged. Ask them which mortgage adviser they used. Alternatively, Google ‘whole of market mortgage broker’ or ‘whole of market mortgage adviser’. This will bring you a list of local mortgage brokers and advisers (different names for the same person).
Have a look at their Google reviews and their Facebook reviews. Make sure they have lots of 5-star reviews and raving fans.
Will a mortgage adviser charge me for their services?
You will find that most mortgage advisers will charge you for their services however there are many that do not charge a fee. When Googling for a mortgage adviser why not Google ‘whole of market no fee mortgage adviser’. This way not only are you going to get an adviser to find you the best rates and deals, but you will also be getting a mortgage adviser at no cost to you!
Can I borrow more money when I remortgage?
If you are considering home improvements or possibly paying off some debts, then this is the perfect time to do it. This can be done as part of your remortgage, meaning you will be getting the best rates whilst avoiding any additional charges you would have received if you had gotten a further advance from your existing lender! Most people wait until they remortgage to plan any home improvements or balance their finances as this is the most financially cost-effective time to do it.
Can I pay a lump sum off my mortgage?
Most lenders allow you to pay 10% off your outstanding balance each year. This is usually sufficient for most years however some years you may want to pay off more than 10%. Perhaps you have been left an inheritance? Remortgage time is the perfect time to pay off as much as you want without any fines or charges from the lender. Your mortgage adviser in conjunction with the conveyancer can make sure this happens. You will lodge the extra payment with the solicitor who will pay this together with the new mortgage raised to your old lender.
Will I have to pay any other fees to remortgage?
Some fees that can be charged are mortgage valuation fees, arrangement fees and legal fees. Although lots of lenders have fees for remortgaging there are many lenders that offer free services as incentives to gain you as a new customer. Your mortgage adviser will be able to find you great mortgage deals that will not cost you one penny!
What documents will I need to remortgage?
When you remortgage you will need to provide a few documents. The mortgage adviser will take copies of your ID. This can either be your passport or your driving licence or sometimes both. The mortgage adviser will need to prove your income therefore you will need to provide your last 3 months wage slips and the last 3 months bank statements showing your pay going into your bank account.
What would happen if I got the timing wrong?
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 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, this would be £4,500. A very expensive fine for completing your remortgage early.
If you remortgage late: A remortgage can take between 4-6 months from start to finish. If you start too close to the end of your rate there is a good chance you will come to the end of your current deal and revert to your lender’s variable rate.
Most lender’s standard variable rates are considerably higher than the rate you will have been on and could mean that your monthly payment could increase anywhere between £200-£400 each month it takes for your remortgage to complete. Therefore, you can see it is very important to start with plenty of time.
Do I remortgage if I am considering moving in the next couple of years?
If you are considering moving home soon you need to step carefully. Your first option would be not to remortgage so you can look afresh for a new mortgage lender at the time of moving home. The problem with this option is it will more than likely mean you will go onto your existing lender’s variable rate and this could prove to be very expensive.
Your second and wiser option is to remortgage when you need to however it is essential that you choose a lender that offers you a portable product! What this means is that when you come to move home you will be able to use your existing mortgage and it will be ported to your new home. If you are increasing your mortgage you will need to top up your existing loan.
Don’t worry if this all sounds complicated. Your mortgage adviser will be used to doing this on a weekly basis and will be there to guide, help and advise you through your options.
So, what’s next?
Give us a call at YesCanDo Money and we will be able to work out the best time to get your remortgage underway. If it is too early, we can take control and contact you with a plan of action on the perfect date to get the mortgage underway (usually 5 months before your existing deal finishes).
If now is the best time to get your remortgage underway we will search the whole market to find you the best rates and deals. We will submit the remortgage on your behalf and correspond with your existing lender, your new lender and also the solicitor who is carrying out your conveyancing. YesCanDo Money will make sure your remortgage completes within a day or two of your existing deal coming to an end, therefore, avoiding any early redemption charges or increases in monthly mortgage payments.
Who are YesCanDo Money
YesCanDo Money are a family-run independent whole-of-market mortgage adviser based in Havant near Portsmouth in Hampshire. With over 30 year’s experience, YesCanDo Money has built a team of amazing advisers and mortgage managers that will help you through every step of your remortgage.
Also, it gets better… YesCanDo Money are a NO FEE mortgage adviser so will not charge you a penny for using their services.
Anyway, don’t take our word on how great we are. Have a look at our Google and Facebook reviews: https://yescandomoney.com/reviews/