5 Steps to a Successful Remortgage Rate-Switch
Remortgaging or switching your mortgage rate can seem like an intimidating task, especially if you’ve never done it before. However, with just five simple steps, you can be well on your way to unlocking the multiple benefits that can arise from taking advantage of this opportunity, including lower mortgage payments – ultimately saving you money on interest over time – and greater month-to-month security than the standard variable rate offers.
This step-by-step guide will lead you through every stage of the remortgage process, including finding the right lender, putting together your application, choosing between fixed and variable rate mortgages and dealing with your current mortgage provider through to completion.
Save money on your monthly payments
You could save thousands of pounds each year by switching from a standard variable rate (SVR) to another type of product.
At Home Group, we have years of experience to help you find the best solution, whether you are looking for stability of payments and therefore fixing your mortgage or interested in researching the market for a more cost-effective variable or Bank of England tracker rate mortgage.
The process is relatively straightforward, and in some instances we can help you switch rates with your current lender which involves minimal or no additional work in the application process.
How much can you save?
As a rule of thumb, a 1% saving reduction in your interest rate on a £100,000 mortgage equates to a circa £80 per month saving. With the rising cost of living, saving £80 per month is a substantial amount of money. The larger the mortgage you have, the larger the savings will be.
Existing Lender
When reviewing what options are right for you, it makes sense to start with your existing lender. Armed with the most basic information, such as your mortgage account number, we can review what your current lender is offering, usually within three to four months of your tie-in period,
In this instance little to no underwriting is required, as the existing lender takes an index-linked valuation of your property and will offer you products based on this and your outstanding balance.
From there, it’s very much a rate switch that goes live once the current tie-in period ends, some lenders if there is a saving will allow you to rate-switch earlier. This may not always be the best option, therefore any qualified advisor you speak to should assess not only the merits of your existing lender but the rest of the market to check whether it’s best to ‘stick’ (with the current lender) or ‘move’ (remortgage to a new lender).
Understand the benefits of different products
When it’s time to remortgage, fixed or tracker mortgages are two of the options available to you – all for varying periods of time.
Your dedicated Home Group Advisor will recommend the right product for your needs once they have a thorough understanding of your current position, your attitude to risk and any upcoming changes to your personal circumstances.
Often the rate and fee structure you require depends on your mortgage size. A fixed rate mortgage will provide you with security for a set period of time; if the Bank of England base rate moves your rate remains fixed for the period you have set.
A standard variable rate or tracker rate mortgage is set at a rate determined by the lender or attached to the Bank of England base rate. This may be slightly cheaper initially than the fixed rate, but the rate can go up or down, and therefore, is not a set fixed payment.
If the mortgage you are looking at comes with an arrangement fee, advisors will take this into consideration when calculating the total cost of the initial set-up period, This will enable you to compare the true overall cost of a mortgage that comes without a fee compared to one that does.
Who do I contact?
A suitably-qualified mortgage advisor will be able to give you all the advice and help you need in discussing your mortgage options and also help to put you in touch with a mortgage conveyancer if one is not included in the package you have chosen.
A mortgage conveyancer is needed to settle the existing mortgage and draw funds for the new mortgage lender as well as dealing with all the legal documentation.
| YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE |