Remortgage Broker and Services
When you take a mortgage, you usually have the opportunity to refinance your deal several times throughout the term. This allows you to consider switching to a better rate, reduce your mortgage term, or perhaps release some equity for carrying out much-needed home improvements.
When you remortgage you typically take a new mortgage product with a new mortgage provider, but there are circumstances when it may be more suitable to remain with your current mortgage provider. For example, your existing provider may offer you the most competitive mortgage deal. More likely, there has been a change in your personal circumstances, which means remortgaging to more competitive mortgage lenders isn’t possible.
Whatever your reasons for remortgaging, we always recommend speaking to us here at Taylor-Brown Financial to ensure you are getting the right mortgage advice for your needs. We can scour the market for the right mortgage while making the process as easy as possible for you.
How does the remortgage process work?
Here at Taylor-Brown Financial, we offer an initial, no-obligation meeting with you to understand your circumstances, whilst identifying your needs and preference for your new mortgage. As your specialist mortgage advisers, this meeting gives us an opportunity to assess your documents before researching the mortgage market to provide you with a suitable recommendation. We are based in Newmarket, but cover the whole of the UK, especially Suffolk and Cambridgeshire.
The next step is to complete the mortgage application, with a new lender, or with your current lender in the case of a rate switch/product transfer.
A new lender will require your application to be underwritten, and will also request a valuation of your property to confirm it is suitable for lending against. They will also assess if the product applied for is appropriate based on the overall ‘loan-to-value’ (LTV) of your mortgage.
More often in the current market, lenders carry out a desktop valuation, which means they assess the property online to confirm the valuation figure for lending purposes. This is usually free of charge as part of the mortgage product.
Following the issue of your mortgage offer, you will require a solicitor/conveyancer to complete the legal work for changing the title of the property (if you are switching your mortgage provider).
Quite often on a remortgage deal, you can get the standard legal work costs covered by the mortgage provider as a feature of the product. As an alternative, you may prefer to engage your own solicitor (at your own cost) and take a cashback deal on completion.
Prior to completion, your solicitor will request a redemption statement from your existing provider, and then draw down on the funds from your new provider to repay the old mortgage. Once you have completed, your solicitor registers the new mortgage details with Land Registry.
What are the main reasons for remortgaging?
There are many reasons why you may consider remortgaging, such as:-
Your current deal is expiring
The most common scenario that prompts a remortgage is the expiration of a current mortgage product. This allows the borrower to seek a new, more competitive deal from other lenders. This is a good time to consider reducing your mortgage term, assuming this is affordable, to reduce the amount of interest you will pay over the full term.
Home improvements
Since the COVID-19 pandemic, we have seen a surge in people wanting to carry out home improvements, adding a study/garden room for example, or increasing the property footprint by adding an extension to allow for home-working.
This can be achieved by increasing your mortgage borrowing with your current lender, to avoid paying the early repayment charge that may be applicable to your existing mortgage product. This is called a ‘further advance’ if you remain with your current lender, although it may be more beneficial for you to remortgage to a new lender, subject to your circumstances.
A drop in interest rates
In the case that the interest rate drops, you may feel it’s worth the early repayment charges on your current mortgage to benefit from a lower rate, to reduce your monthly mortgage payments.
Before you do so, it is important to seek expert advice from an independent mortgage adviser to make sure it’s in your best interests, as you could end up financially worse off if you need to add the early repayment charge to your mortgage balance on completion.
We will crunch the numbers and explain the financial advantages and disadvantages of redeeming your loan, before making a suitable recommendation to you.
An increase in interest rates
While many people take advantage of a drop in interest rates to refinance their mortgage, a fixed-rate term can be helpful if interest rates are expected to rise. This introduces a degree of certainty on payments and protection in the event rates do rise.
Debt consolidation
Debt consolidation is another reason some seek to remortgage, to pay off loans and credit cards, reduce their monthly outgoings and improve cash flow.
As a responsible remortgage broker, Taylor-Brown Financial considers remortgages for debt consolidation very carefully. We will advise you as to whether it is in your best interests to secure debts against your property and ensure you are comfortable with the added interest payable over your mortgage term, should you go ahead. This is a good example of how independent mortgage advice can be very valuable.
Think carefully before securing any other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage.
When is the best time to remortgage?
A mortgage offer is typically valid for up to 6 months from the date of the offer, so we recommend seeking remortgage advice when you are within 7 months of your current mortgage deal expiring.
The advantage of starting the process early is that it allows your remortgage broker to assess your documents, and effectively underwrite your application. This puts you in a good position to secure a deal before interest rates rise say, or before your existing lender will allow you to consider their products.
This may be too early for you to consider the mortgage deals your current provider will offer you, as most lenders in the mortgage market usually restrict access to their existing customer deals until you are within 3-4 months of your existing product expiring.
Most remortgage brokers will follow up later down the line to check your existing lender’s latest mortgage deals. If they are more competitive that the rate you’ve secured with your new lender, your broker will assess your eligibility for the latest deal.
Do I have to remortgage when my current deal expires?
Not necessarily. Depending on your circumstances, it may be financially better for you to remain on your lender's standard variable rate.
When you first take your mortgage, your lender agrees to the borrowing over a pre-agreed term. For example, if you have a 25-year mortgage term and you choose not to remortgage after your 2-year fixed-rate ends, your mortgage rate will revert to its standard variable rate.
Although this can often be more expensive than the deal you were previously locked into, means you are no longer tied in with your lender, so if you redeem your mortgage in the near future, eg. because you are selling your home, you could avoid an early repayment charge.
In most cases, it is beneficial to refinance, either by switching products with your current provider or remortgaging to a new provider. It is wise to consult an independent mortgage adviser to discuss your options and assist you with the mortgage process.
What is payment shock?
The term payment shock relates to the significant increase in your monthly mortgage payments you may face during your mortgage term. For example, if you were previously paying £750 per month for your mortgage on a 2-year fixed rate deal, but are now remortgaging to a higher rate deal costing you £1,000 per month, this is deemed 'payment shock', as your monthly payments are significantly higher.
Lenders consider the effects of payment shock during the mortgage application process. When they underwrite your application, they apply a stress test on your borrowing to assess whether you are likely to be able to afford the requested mortgage at a higher rate in the future. This satisfies the lender that you have some degree of resilience built into your mortgage, beyond the initial rate period.
How long does it take to remortgage?
Typically, the remortgage process takes between 4-8 weeks after submitting your application. By using a mortgage broker, they will be able to work on getting your mortgage offer issued as soon as possible, leaving just the legal work to be completed.
If you remain with your current lender by completing a product transfer/rate switch, you can complete within a matter of days, assuming it makes financial sense to do so.
Are UK mortgage brokers regulated?
Yes, all mortgage brokers in the UK are regulated by the Financial Conduct Authority, meaning that you can access the best deals in complete confidence.
Are mortgage brokers and mortgage advisers the same thing?
On the whole, mortgage brokers and mortgage advisers are considered the same thing. However, bank mortgage advisers obviously represent a specific mortgage provider. To be sure you are receiving impartial advice, ensure your mortgage brokers/advisers are independent.
How do mortgage brokers work?
A mortgage broker will scour the market to find you a competitive remortgage deal that is suited to your circumstances. Most brokers will also take the reigns throughout the application process and remain in close contact with you until your mortgage completes.
