Lockhart Grey Financial Planning Ltd

When you re-mortgage, you are switching your mortgage to another deal and/or another mortgage lender.

Are you one of the thousands of borrowers throughout the UK who continue to pay over the odds for their mortgage?

Are you one of the thousands coming off a Fixed Rate Mortgage and are now worried about your mortgage payments increasing dramatically?

Many borrowers feel a loyalty to their lender, yet mortgage lenders usually do not reward customer loyalty.

In times gone by the standard practice was to take out a mortgage with a lender and then you remain with that lender through out the term of the mortgage. However in today’s competitive market the consumer has the freedom to switch lenders and instruct new lenders to take on their mortgage. Re-mortgages can be completed reasonably easily and quickly. The costs may be relatively small however the savings can be excellent. What this means is more money in your pocket and that you are no longer tied into one company at the same rate. It is possible to re-mortgage up to 95% of your property. We always remind our customers that it is important to think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Re-mortgages are very popular, and with good reason. Re-mortgages can be used for various reasons, most people simply switch mortgage because it will be cheaper for them. Whether you are switching your deal for a better re-mortgage rate, more suitable conditions, better service or increasing the size of your home loan, there are thousands of re-mortgage deals available.  Lockhart Grey Financial Planning can accommodate all your re-mortgage needs.

Re-mortgage Pros and Cons

• You may be able to substantially reduce your monthly mortgage payments.
•  Re-mortgages is cost effective to free-up cash for you
•  Many providers and increased competition means it is cheaper than ever to re-mortgage.
•  Make sure you do not incur additional fees i.e. legal; survey; early redemption penalties.  This may reduce any monthly savings you have made

Remember if you borrow additional funds, they have to be paid back!

Get Cash with a Re-mortgage

Re-mortgages can be the easiest way of raising cash. What can you use the additional capital raised for?  Pretty much any legal purpose i.e. new car, boat purchase, deposits for buy to let property, debt consolidation and many, many more things.  Each lender has their own criteria in regards to re-mortgaging and that is where Lockhart Grey Financial Planning expertise will stand you in good stead.  However remember that you are increasing the size of your mortgage to free up capital.

Re-mortgages & Debt Consolidation

If you have credit card debt and/or personal loans, whether they are secured or unsecured it may possible to consolidate all your debts into your mortgage by re-mortgaging.

You can raise cash for any legal purpose and may not have to provide estimates or be restricted by lenders conditions. Credit card interest rate is typically 23% APR, personal loans about 11%, secured home improvement loans are around 13%. Mortgage interest rates are around 5.5%. By re-mortgaging you can drastically reduce your monthly outgoings. Re-mortgages can consolidate debts into one loan that is easier and cheaper to manage however you must have some equity in your property in order to do this.

This makes a lot of financial sense and Lockhart Grey Financial Planning will help guide you through the re-mortgage maze.

Simply save money on your monthly outgoings

For example, your introductory fixed interest rate is now finished with your current lender; therefore you could get a new fixed, tracker or discounted rate, or a lower APR, with another lender. You can re-mortgage simply to save money on a month – to – month basis. If you’re currently paying the standard variable rate, we have great fixed, tracker, discounted and flexible rates to suit your pocket.

Bad credit re-mortgages

Don’t worry. Even if you’ve been refused credit elsewhere, and have a poor credit history we can still consider your application. Whether you have defaults, CCJ’s, mortgage arrears, previous bankruptcies or repossessions, or simply can’t prove enough income for traditional lenders, your adverse credit will not necessarily decline your re-mortgage application as we have a range of high street & specialist lenders who can help.

Taking out a re-mortgage doesn’t have to be expensive, and many re-mortgage providers now provide specialist re-mortgaging services. Many charge no fee for legal, survey and arrangement costs.

If you wish to consider re-mortgaging please fill in our quick enquiry form, or call us for a free, no obligation, consultation. You may also find our mortgages glossary useful to explain some of these terms.

Remember it is in lenders’ interest to provide you with a mortgage, as long as they do not feel you are stretching yourself.  They want your business.  A mortgage is generally a lower risk to them, compared to a personal loan, or a credit card, as they always have the house to “secure” the loan against if you are unable to make your payments.

Re-mortgage Deals (Not suitable for everyone)

It is worth noting that a re-mortgage is not the best option in all cases.  Whilst you may receive a lower interest rate than from you current lender and therefore save on a monthly basis, will this actually be a true saving once all the potential actual costs are added.  Further pitfalls may be:

• Incur new valuation, arrangement and solicitors fees, even if you have already paid these for your mortgage with your current lender.
• Extending your repayment period, therefore whilst paying less monthly, the total amount you repay could be more.

If you have an existing fixed, capped or discounted rate mortgage, or if you received substantial cash back when you took your current mortgage, then an early repayment charge, typically 3-5% of the mortgage loan amount, may apply to your mortgage.  In the event you re-mortgage within the initial benefit period of your existing mortgage you will be expected to pay the early redemption penalty or cash back in full.

New early redemption penalties: Be careful when selecting a new mortgage with a low initial interest rate, as the new re-mortgage lender may apply early redemption charges applied to the new loan. They may also apply extended tie in periods, which mean that after your new deal is finished they may tie you to their current variable rate for a length of time, therefore increasing your monthly payments.

Your new lender may offer an attractive interest rate, will they continue to do so in the future? Look at the lender’s SVR (Standard Variable Rate), as a measure of its current competitiveness – a low rate should mean that it is looking after its existing borrowers as well as new customers.

You may lose valuable mortgage benefits. For those who took out a mortgage prior to 2nd Oct 1995, the State income support to qualify borrowers kicks in if you are unable to work after eight weeks of claiming, it is worth 50% of the interest for the next 18 weeks and 100% after that date. For mortgages taken out after 2nd Oct 1995 the borrower gets no help with interest payments for the first nine months of making a claim.

Loans, for example, are structured to be repaid over a much shorter period than mortgages – typically 3-7 years. High interest charged on credit cards may prove a strong enough incentive to clear the debt sooner rather than later.   By consolidating your debts into one payment, in the short term you may be better off however your additional borrowing is may be greater over a longer term, considering that the typical mortgage is over 25 years, and therefore you would typically pay a lot more in interest payments.  Remember that in the long run you may pay considerable more for your re-mortgage than you would by keeping all your debts separate.

You may be able to switch your existing mortgage deal with your current lender, avoiding any un-necessary costs.