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Ask the Expert: Remortgaging

Do you know what happens at the end of your fixed term?

Whether you’ve fixed for 2 years or 5 years it’s important to remember when your fixed term comes to an end.

When your initial fixed rate expires, unless you’ve made other arrangements you’re automatically switched on to the standard variable rate (SVR) of your lender, which can cost you more per month. If you’re not planning on moving home, remortgaging could be your best option. Remortgaging basically means moving your existing mortgage from one lender to another.

A good place to start is having a mortgage review as this will establish whether a more cost-effective mortgage is available; using a specialist broker they will take in to account your circumstances as a contractor. They will be able to look at other deals from your current lender, as well as deals from a comprehensive range of other lenders. The review can also show if you already have the best possible deal available.

A Remortgage may not always be the best option for you and does depend on your situation to help answer some questions you may have around remortgaging, we’ve asked one of our experts, Senior Mortgage Consultant Alexandra McCambridge, to shine a little light on how these mortgages work and what you can expect from them.

When is best to Remortgage?

To ensure you have plenty of time to look at the market, and secure the best rate, I’d suggest around 4 months before your current rate ends.  If you’re an existing client of CMME, we’ll automatically contact you to arrange convenient time to discuss the available options.

How much could I borrow? 

This will depend on your individual situation, and the lenders affordability calculations.  The maximum is typically up to 5 times income.

How does the Remortgage process work?

We’d start by taking details of your personal situation and mortgage requirements.  This will ensure we can recommend the most appropriate mortgage for your needs.  We’d then discuss the recommendation and gather the documents the lender will need for processing.  Once we’ve double checked everything, we’ll submit the application and follow it through to Mortgage Offer.

If you’re staying with your current lender, they will take over and apply the new rate and payment automatically.

What happens if my mortgage is moving to a different lender?

If you’re moving to a new lender, the process above would be followed, but there is some legal work involved too. 

After the Mortgage Offer has been issued, the solicitor will take over and work with you, your current and new mortgage providers to ensure new mortgage starts on the right day.

Are there specific properties I cannot Remortgage?  

As long as a property is habitable, there should be lenders who can consider a remortgage.

Are there any fees involved with remortgaging?   

Typically a lender arrangement fee would be around £1,000.  We’d analyse the interest rate and fee, to ensure that you only pay a fee if you’re going to benefit from it.  There is our CMME fee of £995 for brokerage service, this gives access to our exclusive underwriting and knowledge of the contractor mortgage industry.

Do I need to arrange a solicitor or conveyancer for a Remortgage? 

Not if you’re staying with your current lender. 

If you are transferring to a new lender, then a solicitor will need to be involved.  This can be one you chose, or you can opt for a lender who offers ‘free legals’.  This is where the lender appoints the solicitor and covers the cost of the legal work for the remortgage. 

Due to client feedback, we are finding some lenders moving away from ‘free legals’ towards cashback that allows you to appoint your own solicitor while they make a contribution.  This is something we’d discuss with you.

Should I consolidate my debts?

We can discuss this with you in detail, and work out whether it is cost effective and actually the best thing to do. 

How much equity do I need in my property?   

Many lenders will allow you to release up to 90% of the value of your home as part of a remortgage.  As with any mortgage, the more equity you have, the lower the rate, but we’d work with you to tailor it to your own personal situation

Will my credit history play a part?

Yes, as with any mortgage credit history does impact on the mortgages on offer.  Due to our relationships with lenders, we can consider many situations that other mortgage providers don’t have access to.  That way we can ensure the right combination of understanding mortgage provider and interest rate.

What type of mortgages are available as a Remortgage?

All types of mortgage are available, for example; fixed, tracker, offset.  We’d discuss your individual situation and recommend the most appropriate option for your needs.

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