Remortgage Guide – Frequently asked questions

What does it mean to remortgage?

To remortgage means you take out a new mortgage on a property you own. You can replace an existing mortgage or borrow additional funds against your property – without moving house.

 Should I remortgage?

There are a number of reasons to think about remortgaging. After all, for most people a mortgage is the biggest financial commitment they have. By remortgaging, you may be able to make a saving or streamline your outgoings a little.

This guide will answer a few simple questions, however it is advisable that you speak to a remortgage expert – as it may not be the right option for you.

Here are a few common reasons to think about remortgaging:

  • My current deal is about to end
  • My property’s value has increased
  • I want a better rate
  • I want to borrow more against my property
  • I need a more flexible mortgage
  • I’m considering home improvements
  • I want to review my current debts

However, there can also be reasons NOT to remortgage, such as the following:

  • My mortgage debt is small: Some lenders won’t take on mortgages below £25,000. Also, you are less likely to make a saving by switching because the fees may be higher.
  • My early repayment charge is huge: Again, the charges for early repayment may be so high that it’s not worth it. An adviser will be able to help do the sums.
  • My circumstances have changed: If your financial circumstances have changed since you took out your current mortgage – for instance, you’ve become self-employed – you may not fit the criteria for a new lender. But, it’s worth doing your research and gaining help from a remortgage adviser.
  • I’ve had credit problems: Likewise, if you have had credit problems since taking out your last mortgage, you may find you no longer fit the criteria for some lenders. Remember, even though you were accepted in the past, that does not guarantee that you will be accepted with another lender.
  • My current rate is actually really good: In this case, there’s not much point in looking to move lenders. However, this may not be the case forever, so it’s always worth checking up every now and then to make sure you’re still in the best position.

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When should I start thinking about remortgaging? 

If your mortgage is due to end, it’s worth giving yourself plenty of time to start researching and looking at your personal pros and cons for remortgaging. We recommend leaving yourself at least about 14 weeks before your current deal will end to give yourself time.

If you don’t remortgage before your current deal ends, you will be put on to the lender’s standard variable rate (SVR), which might not be the cheapest option for you (but don’t automatically assume it’s not, make sure you compare it before disregarding it).

What do I need to know before I start?

Firstly, check what the early repayment fee is – and what date it applies until. You also need to know the exact amount you owe your current lender.

You also need to make sure your credit file is up to scratch too. Check there are no mistakes or that you have no tarnishes since taking out your last mortgage. Read our guide on how to spruce up your credit file here. (Remember, it is not a quick fix.)

How much equity do I need in my property?

Simply put, how much of your home’s value do you need to borrow from the new lender? If you are borrowing less, it means you are more solvent and a less risky borrower. The bigger your equity and savings, the better rate you are likely to get and the more you save each month.

What type of mortgage should I move to?

There are many different types of Mortgages and various options available – from fixed rates to trackers, SVRs and variable-rates. If you need a refresh on what different types of mortgages mean, take a look at our handy mortgage guide here.

What next?

Speak to a mortgage adviser to help you take the first steps towards remortgaging. There is a lot to research and think about to make sure remortgaging is the right option. A Linear adviser can help every step of the way.

Your property may be repossessed if you do not keep up payments on your mortgage.

Linear charge a non-refundable mortgage arrangement fee of between £399 and £999 when an application is submitted to a mortgage lender for you. Your adviser will agree the arrangement fee with you before commencing any chargeable work. The actual amount payable will take account of your financial circumstances, the complexity of borrowing requirements and the amount of work required to fulfil your needs.