Remortgaging is the process of switching to a new mortgage deal while staying in the same property. It can be a savvy financial move for homeowners. You may be looking to secure a lower interest rate, release equity, or consolidate debt. Whatever your goals, remortgaging offers opportunities to optimise your finances. In this post, we’re detailing some key strategies to help you make the most of the remortgaging process.
Assess your current mortgage
Start by reviewing your existing mortgage terms, including the interest rate, remaining term, and monthly payments. If you’re currently in a fixed-term mortgage deal, make sure you understand any fees associated with early repayment. Exiting your current mortgage deal may also bring penalty fees. The associated cost of leaving your current deal should be compared to the savings brought by a new deal.
Determine your objectives
Clarify your objectives for remortgaging. These could be:
- Reducing your monthly payments
- Shortening the loan term
- Releasing equity for home improvements
- Consolidating debt
Identifying your goals will guide your decision-making process.
Consider your equity position
Your loan-to-value (LTV) ratio is determined by the amount you owe on your mortgage compared to your property’s value. This can impact the remortgage options available to you. We’d advise aiming to maximise your equity position to access better rates and terms. Paying off a small amount from your mortgage can be a huge benefit in improving your LTV ratio before remortgaging.
Understand the costs
Along with early repayment or exit feeds, there are also fees associated with remortgaging. These can include arrangement fees, valuation fees, legal fees, and early repayment charges. You should factor these costs into your calculations to determine the overall affordability and benefit of remortgaging.
Check your credit score
Your credit score plays a crucial role in remortgage eligibility and the interest rate you’re offered. You can obtain a copy of your credit report and take steps to improve your score if needed. This can include paying off any other debt before remortgaging.
Plan for the future
Look ahead to your future financial goals and circumstances when choosing a remortgage deal. Consider factors such as job stability, potential income changes, family plans, and lifestyle preferences. This will help ensure your mortgage aligns with your long-term plans.
Consider fixed vs. variable rates
Decide whether a fixed-rate or variable-rate mortgage is better for your circumstances. Fixed-rate mortgages offer stability with a consistent interest rate over a set period. However variable-rate mortgages offer lower initial rates, but are subject to fluctuations. The Bank of England* base rate and current economic climate can impact whether a fixed or variable-rate will be best for you. Contact us if you’d like to discuss the best type of rate is most suitable for you.
Seek professional advice
The team at Bell Mortgage Solutions are on-hand to find the perfect remortgaging deal for your requirements. We know every client has individual needs, and we pride ourselves on offering a flexible, bespoke mortgage advice service. We have access to the whole of the market, including most major banks and building societies. We’ll provide personalised advice, assess your options, and help you navigate the process smoothly.
Ask us to shop around for rates
Your current provider will offer you a new deal at the end of your existing one. However it may not be the best deal for you. Contact us and ask us to shop around for the best rates for you. We’ll review your circumstances and find the best possible deal for your from lenders across the market. We’ll consider factors such as interest rates, fees, and repayment terms.
Act promptly
Once we’ve found a suitable remortgage deal for you, we’ll act promptly. We’ll lock in the rate for you and initiate the application process. Rates and offers may change, so it’s important to act swiftly.
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Remortgaging presents homeowners with an opportunity to optimise their finances. This can be reducing monthly payments, accessing equity, or securing better terms on their deal. We’ll work with you to make informed decisions and maximise the benefits of remortgaging for your financial future.
Please note: Think carefully before securing other debts against your home. Consolidating debt may reduce your outgoings now, but you may end up paying more overall. Your home may be repossessed if you do not keep up repayments on your mortgage.
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The information contained within was correct at the time of publication but is subject to change.
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