There are two options when re-mortgaging
Either stay with your current lender or switch to a new lender who’s offering a better deal. You can complete this yourself or use a broker like me to find you the best deal. Later in this article, I’ll compare going direct vs using a broker but for now, let’s have a look at the two lender options.Your current lender may offer you a new deal, provided you are out of your current commitment period on your existing mortgage.
Lenders refer to these as retention or product transfer deals. Your lender is most likely to offer you multiple options such as fixed, tracker, or discount rate mortgages, for a number of benefit terms such as 2,3,5 years or whole term deals. They may also offer these products with or without fees payable to arrange them, usually both. Very rarely is there just one option and as a result, this can very very confusing. After all which one do you choose and how do you know you’ve made the right choice.
Staying with your current lender is by far the most convenient option. Unless you are capital raising, they will rarely request any documentation and will process the request very quickly, usually within 2 weeks, possibly within 2 hours! However, don’t be blinded by convenience! More often than not the best deal lies elsewhere. The mortgage market is incredibly competitive, with many lenders competing for your business and the re-mortgage business generally represents lower risk lending. Due to this lenders are very keen to tempt you from your current provider and will often offer a more competitive deal to do so. Not only may they tempt you with great rates, but low or no arrangement fees, a free re-mortgage legal service, and free valuation. On top of this, some may also offer cash back.
However, the process is more involved, and more work needed. As you have no current
relationship with the new lender, a mortgage application would need to be completed,
supporting documentation provided and legal work completed. A bit of a headache if doing it yourself, however, you may stand to save a significant amount of money by doing so.
So worth a little bit of work to potentially save you hundreds or even thousands of pounds But what about the cost? Whether you stay with your current provider or move to an alternative lender the arrangement fees are generally the same. Some products have no mortgage arrangement fee and some products will come with a fee. A typical mortgage arrangement fee is around £1,000 which can be added to the mortgage or paid on application.
If staying with your current lender, there would be no valuation, but if moving to a lender there may be. However, once again most lender’s off a free basic valuation when re-mortgaging.
In terms of the legal cost. If staying with your current lender then there isn’t one provided there are no changes to property ownership. If moving to a new lender, most offer a free re-mortgage legal service or a cashback offer aimed at covering the cost of a basic re-mortgage.
When looking at your re-mortgage options it’s important not only to consider the interest rate but also any fees which may be applicable. After all, it’s the overall cost which should be considered not just the interest rate which determines the monthly mortgage repayments So, should you do it yourself or use a broker. Well, of course, I’m going to say use a broker!
But let’s have a look at the pros and cons. First and foremost, lest talk about the elephant in the room! Brokers, including me, charge a fee for our expertise, service, advice and time. It’s how we make a living and ill make no apology for that. However, using a mortgage broker takes the work out of finding the right mortgage; I’ll search the whole market and compare all the mortgages that are available, opposed to just considering your current lender and having a limited choice.
I’ll not only look at the interest rate but also any charges which may apply, these charges can significantly affect the overall cost of the mortgage and must be considered.
I hold a professional qualification and I’m authorized and regulated by the Financial Conduct Authority. This means I have a duty of care to you and must do everything possible to obtain you the best mortgage. I’m also responsible for my recommendation meaning you are protected by the Financial Conduct Authority, whereas going direct to a lender and not receiving advice would mean no protection being offered at all. Your lender will only offer you’re their products and have no knowledge of what else is
available to you. I’ll compare the whole of the market to ensure you have the very best deal available Finally, I work for you and not the lender, I’ll visit you at your home at a convenient and I’ll guide you through the entire process, not just the mortgage application. You won’t have to spend hours on the phone or wait days or weeks for an appointment. I’ll hold you hand as much or as little as you need.
In addition, a good broker will contact you well in advance of your existing product end date to ensure you never pay more than you need for your borrowing.
Arranging your re-mortgage through me at the key to mortgages means an ongoing commitment from me to keep track and act when your mortgage is up for renewal, allowing you to rest assured knowing that when the time comes I’ll be in touch.
You may have to pay and early repayment charge to your existing lender if you re-mortgage Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Key To Mortgages 