Is Your Existing Mortgage Deal Coming to an End Soon?
If your mortgage deal is nearing its expiration, now is the perfect time to explore your options. Transitioning to your lender’s standard variable rate (SVR) can lead to significantly higher payments, so taking proactive steps can help you save money.
Your mortgage is one of your largest financial commitments, making it essential to review your options as each rate deal period concludes. This is also an excellent opportunity to consider borrowing more for home improvements, or even shortening your mortgage term to pay it off faster.
Understanding Your Options: Remortgage vs. Product Transfer
We’re here to assist you in finding the most suitable mortgage, whether that means switching lenders (remortgaging) or sticking with your current lender (product switching). Here’s a breakdown of what you need to know:
What Is a Remortgage?
A remortgage involves switching your mortgage from your current lender to a new one. Homeowners often choose this route to secure a lower interest rate, reduce monthly payments, or access cash for home improvements. Some even opt to shorten their mortgage term to pay it off sooner.
Think of it like shopping for a better energy provider or car insurance. Staying with your current lender isn’t always the best or most cost-effective choice. The mortgage market is competitive, and rates fluctuate frequently, so consulting a mortgage adviser can help you find the best deal tailored to your circumstances.
When Is the Right Time to Remortgage?
Consider remortgaging if:
- Your introductory deal is about to end, and you want to avoid the higher SVR.
- You need cash for home improvements.
- You want to gift money for a family members deposit or cover school fees.
- You’re looking to reduce your mortgage term.
- Your home’s value has increased, improving your loan-to-value (LTV) ratio.
- Your current lender’s product transfer rates are higher than available remortgage options.
The Remortgage Process: Step by Step
- Start Early: Begin discussions with a mortgage adviser at least six months before your current deal ends. This allows ample time to explore options and avoid the SVR.
- Gather Information: Your adviser will assess your situation, affordability, and future plans to determine the best mortgage options.
- Application Submission: If switching lenders, you’ll need to provide income evidence, bank statements, and identification.
- Underwriting and Valuation: After submitting your application, the lender will underwrite it and conduct a valuation, often at no cost to you.
- Legal Process: You’ll need a solicitor or conveyancer to handle the legal paperwork. Many lenders offer free legal services, but you can choose your own if preferred.
- Mortgage Offer: Once everything is approved, the lender will issue a mortgage offer.
- Completion: Your solicitor will inform you of the completion date. Ensure you provide the correct end date of your existing mortgage to avoid any early repayment charges (ERCs).
Conclusion
Reviewing your mortgage options as your deal ends is crucial to ensuring you don’t pay more than necessary. Whether you choose to remortgage or switch products, understanding the process and seeking expert advice can lead to significant savings and better financial health.
If you have questions or need assistance navigating your mortgage options, don’t hesitate to reach out. We’re here to help you make informed decisions tailored to your unique circumstances!