Top 5 - Remortgage Tips

Hi, everyone. I'm Daniel. This is Kye.

This is Belle, and we are the directors...

she's not a director!.  I'm Daniel. This is Kye.

And this is Belle. 

And we are, well two of us are,  the directors of Crescent mortgages.

Today, we're going to be giving you  our top five tips for remortgaging.

So if you have a mortgage,  make sure you stay tuned

as we could save you a lot of money  and a lot of time.

So, first of all, what is a remortgage?

So when you take out a mortgage, you will  usually sign up to a specific scheme

for a specific period of time  with the bank or building society.

So, for example,  you might tie in for a two year fix

where you commit  to staying with the lender for two years

and they commit to giving you a specific  interest rate for that two years.

Now, when that scheme comes to an end, you  then need to shop around

and find another competitive scheme,  which is called remortgaging.

OK, so on to our top five tips.

First of all, number 1

sounds like an obvious one,  but make sure you do actually remortgage.

And what we mean by that,  you don't have to remortgage.

You can just leave your mortgage alone.

If you do that, your lender will,  at the end of your scheme, move

you usually on to a much higher  standard variable rate,

which can cost you a huge amount  more each month.

Do you have some stats on this Kye?

Yeah, it is estimated that  between 27 percent and 46

percent of people are on the standard  variable rate at the moment.

It's likely a lot of those could  remortgage and often

they'll pay thousands of pounds  more than they should be.

In the UK right now??

Right now. Oh my goodness. 

OK. So, yes, it make sure you do  actually remortgage.

There'll be lots of you out that  probably are aware that you need to do.

It is either coming up 

or you're already set on the standard  variable rate.  If that is the case.

Get in touch and we can have a look  and see how much money you could save.

Number two, start 

your mortgage application in advance,  so do not leave it too late.

Some people think that the process  just takes a couple of weeks.

Absolutely not true if you if you leave it

until your your mortgage  is only a few weeks away from ending.

You're not going to  give yourself enough time.

And you would almost certainly move on 

to the much higher standard variable rate  that we referred to.

We generally advise to start the process  at least three months in advance.

But ideally, if you do it

sooner, you could actually lock  in a more competitive rate. Yeah.

Yeah, it's true. 

I mean, up to six  months is when the window

first opens for a lot of lenders.

And if we did secure one  six months earlier,

it might feel like it's a bit soon.

What happens if things change? 

Well, we will happily review  your circumstances

throughout that six month period  and if rates change

or if your situation changes often,  you can change up right

up until the point of the actual mortgage  taking over. Good point.

Number three, you can usually choose  whether to remortgage to a new lender,

so to a new bank or building society,

or you can often  stay with your existing lender.

So they will usually offer you a scheme  to stay with them

so that you don't actually have to go  through the full remortgage process.

Now, most mortgage 

brokers will have access to both options  so they can move you to a new lender

or they often will be able to keep you  with your existing lender

so they can actually compare  the two options for you

and you can work out  which is best for you.

The benefits of moving to a new lender  are that you've got the

whole market to choose from. 

So the chances are  you might be able to find

a better interest rate  as opposed to your existing lender,

who will only have one of one set of rates  to to offer you.

However, if you do stay  with your existing lender,

the process can be a bit easier  as they don't need to go

through the same full assessment  as if you go to a new lender.

But again, speak to your broker. 

They'll give you the comparison and then  you can make the right decision for you.

Number four, remortgaging  is the right time

to make any material changes  to your mortgage.

Now, this would apply  to everyone, you know, don't

just make a change for the sake of it.

But if you have come into some inheritance  and you want to pay a significant amount

of your mortgage off,  or if you potentially want to borrow

some additional funds,  maybe do some home improvements,

or if you want to change the term of your  mortgage or, you know, increase the term

if you're struggling to maintain your  payments or  what is generally advisable.

If you want to reduce your term  so that you get the mortgage

cleared quicker,  which reduces your overall interest,

then generally it's easier to do this  when you remortgage than it is

to make these changes when you're half way  through a scheme and tied in

with your your existing lender.

Number five, this final point  is applicable not just to remortgages,

but actually to to anyone  looking for a new mortgage,

whether you're remortgaging  or whether you're purchasing.

Make sure you pick the right scheme  for your circumstances.

So you may have just been on a five year  fix up until this point,

which is coming to an end,  which is why you're looking to remortgage.

Now, if you only expect to be in the home  for another two years,

then do not tie yourself on  to another five year fix.

Sometimes if you go directly to your bank,  they may not always give you

advice in this area. 

But if you do pick the wrong scheme,  you could find yourself being tied in for

too long and actually having to pay quite  hefty fees to redeem the mortgage early.

So, again, make sure you do  pick the right scheme for your plans

and again, speak to your mortgage broker  who will be able to

pick the right scheme that's applicable  for your circumstances. Yeah.

Those early repayment charges  that Dan mentioned, they can be quite big.

In real terms, they average 

from one percent to five percent. Five  percent?! Five percent, yeah.

So on a £150,000 mortgage.

you're ranging from £1,500 to £7,500.

And that's, you know,  for a relatively normal mortgage size.

So making sure you make the right decision  for you is really important.

And that's where,  hopefully the advice from a broker

and that conversation between the 2 of you  comes in.  Good point.

That sums up our five  top tips for remortgaging.

Now, of course, that  there are far more things to consider.

So if you need help  with any of those five points or anything

else, your broker should be able  to assist you with all of them to help

you make the right decision.  So any questions for us?

Either leave them in the comments 

or you can drop us a message  or give us a call and we can

run through everything with you.  We hope you enjoyed it.  Thank you.