How soon can you remortgage before fixed-rate ends?
Kabeer Kher and Matt Morriss talk all about Remortgaging prior to your mortgage product expiring.
Can you Remortgage before a deal ends?
Yes, for the most part, people wait for their deal to end, but there can be scenarios where somebody wants to move home or borrow extra funding,or they have another plan in place that would necessitate exiting their deal early. There would most likely be a penalty applicable if you leave a Fixed-rate deal.
How soon can you Remortgage after buying?
You would often need to wait about six months after buying a property before you’d be able to Remortgage, because lenders may see any immediate plans as suspicious. There are some lenders that would permit a Remortgage shortly after buying. so if it was something you needed to do urgently, some lenders would offer that, but typically not high street lenders.
How soon can you Remortgage before the Fixed-rate ends?
It depends what the client’s plan is, for the most part it’s three months prior to the end of the current deal. You can either sign up to a new deal with the existing lender or start the Remortgage process at that point.
A lot of lenders will actually hold a mortgage offer for six months, so may allow you to begin the remortgage process up to six months before the end of your current deal, but it will usually be three.
In the environment we’re in right now, when rates are rising, a lot of people are choosing to Remortgage sooner, rather than later, to reserve that rate before it gets any higher.
How far in advance should I Remortgage?
If you’re thinking about rates, then when rates are rising, you want to do it as soon as possible. If you’re Remortgaging to a new lender the paperwork can take a bit of time, so I typically advise my clients that the absolute minimum you want to leave before the deal ends is six weeks.
This would be two or three weeks to get the mortgage offered and two or three weeks to arrange it, but we normally advise to start looking at Remortgaging four or five months in advance, to leave time to consider your options.
Six weeks is really last minute, so beyond that, you’re probably going to go on to the Standard Variable Rate for a period of time.
How long does it take to Remortgage?
There are far too many variables to give a definitive answer. A typical turnaround is three to four weeks, it can be more or less, there are a lot of factors involved.
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Can I change my mortgage product before completion?
You do have the option to change the mortgage product with your existing lender, typically that’s more common in an environment where rates are going down. In the current environment when rates are going up, that’s far less common, because new rates are quite often higher than what you applied for.
You can change the product right up until completion, it does take a bit of time, so you need to leave at least a week or two for the advisor to select the product and for that offer to get reissued and sent back out to the Solicitors. It’s not something you want to be doing a couple of days before your deal end date.
What happens if you don’t Remortgage before product expiry?
Quite simply, you would go on to the lender’s Standard Variable Rate, which, of course, will most likely be higher and result in your payments going up.
Why is it important to review a Remortgage before your deal expires?
The main benefit is obviously to try and save money. If you’re purely looking to keep the same loan and not raise any extra funds, you’re purely looking at the most cost efficient way for you to have your mortgage.
If you bought a property with a low deposit, you might actually find that over time, as house prices have gone up, and the last couple of years house prices have gone up quite a bit, that you’re entitled to a much lower rate, because you’ve got more equity in your home. It’s important to keep in touch with the Mortgage Broker, because even if you’ve locked in for a longer period, you could find yourself in a position to save money even if it means paying an Early Repayment Charge.
What costs are involved with a Remortgage?
The three main costs are the lender fee, which will range from 0 to to £2000 depending on the product, there can sometimes be a broker fee and of course solicitor costs, although some lenders offer a free legal package.
If you Remortgage with your existing lender, that’s just a product transfer, so no solicitors are involved.
What would be the first steps for someone looking to Remortgage?
The first step is always to do a full fact find, because we always give tailored advice, and to do so, we need to understand the whole picture of your finances. Once we’ve got that idea, we can give that bespoke advice that’s best for you.
The first appointment is usually quite long, but once we’ve done that, the length of time is down to the individual. If it’s a really straightforward application, then one appointment is usually sufficient, however you might need a further appointment if it’s more complex. It’s all down to the individual and at Yellow Brick, we aim to give the best advice possible for the individual.
Sometimes it can be not so much about where the client is now, but where they want to be in the future. Beyond the rates, we might raise with the client whether they may want to move in the future, or reduce the term of the mortgage to get it paid off quicker. There’s a lot of factors involved that not everyone will think about when they’re looking for a new deal.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.