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How does remortgaging work?

Remortgaging is where you pay off your existing mortgage and switch to another lender. There are good reasons why you might consider remortgaging – not least saving money – but you need to consider the costs before you do. Remortgaging to pay off debt can end up costing you more than other options.

Remortgaging to get a better interest rate

When you take out a new mortgage, you normally get an introductory deal – for example a low fixed or discounted rate or a low tracker rate for the first few years of your mortgage.

Introductory deals normally last for between two and five years. Once the deal ends you’ll probably be moved onto your lender’s standard variable rate, which will usually be higher than other rates that you might be able to get elsewhere.

So when your introductory period ends we can take a look at the market  for you to see if switching to a new mortgage deal will save you money.

Remortgaging advice – What to watch out for

Some lenders might offer fee-free deals to tempt you, but if they don’t you’ll have legal, valuation and administration costs to pay. we can work with you to establish the best deal for your individual circumstances.

The application process is likely to take around 6- 8 weeks to finalise and involve a consultation with a qualified mortgage adviser.

If your mortgage is is ending its introductory period with the next 3 months now would be a good time to get a review. This email address is being protected from spambots. You need JavaScript enabled to view it.

You will have to show evidence of your income, such as payslips and bank statements, and your outgoings, including other debt repayments, household bills and living costs such as travel, clothing, entertainment and childcare.

Lenders will have to check you can afford the mortgage and also “stress test” that you will be able to afford the mortgage payments in the future if interest rates were to rise.

All mortgage applications in person or over the telephone will be on an advised basis. Lenders or mortgage brokers will only be able to recommend products that are suitable for your needs and circumstances and will question you closely to work out what is suitable.

 

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