Whilst you can remortgage at any time, it’s a good idea to remortgage at a time when you’ll reap the benefits of doing so. Remortgaging usually comes with financial implications and generally has some upfront costs, so it doesn’t always make initial sense for your bank balance.
Remortgaging gives you the opportunity to shop around and secure the best mortgage deal for your circumstances. Let’s look at the reasons why you might choose to remortgage, and the best time to undertake this process.
Why should I remortgage?
When done correctly at the right time, remortgaging can save you money. There are many reasons why you might choose to remortgage. For example:
- Your existing mortgage product has come to the end of its initial fixed interest term and you’re about to be put onto a lender’s standard variable rate, which may be less attractive than other options available to you
- You need to find a mortgage product with cheaper monthly payments because of additional commitments you have taken on or a change in personal circumstances
- You’re currently on a variable rate mortgage and you want to find a product that offers greater payment stability
- You have received money and would like to pay off a lump sum of your mortgage with it
- Your personal finances and/or the mortgage market have changed since you originally took out your mortgage and better deals are now available to you.
You might also choose to remortgage to raise additional money against the security of your home. This could be for:
- Home improvements
- Buying a car
- A deposit on a second home
- Paying off a Help to Buy loan
- Staircasing out of shared ownership
- University costs
- The consolidation of debts
Find out more – ‘How to remortgage your home’
When should I remortgage?
Just because you can remortgage at any time, it certainly doesn’t mean that you should. If you want to remortgage before your fixed term ends, you’ll likely be subject to early repayment fees. These can be costly, amounting to as much as several thousand pounds, depending on how far into your current deal you are.
With this in mind, it’s not worth remortgaging if you’ll end up spending more on fees than you’d save with a new mortgage product. It’s always worth speaking to a mortgage advisor and broker, such as us here at Mortgage Light, about what these fees could look like and when might be a good time for you to remortgage to get maximum benefit from the process.
Generally speaking, it is advised to begin the remortgaging process 3-6 months before your current deal ends or when you are looking to put the new financial structure in place. That way, you will have enough time to speak to your mortgage advisor and broker, find a suitable new deal and secure it, with some time to spare for the inevitable hiccups. That being said, it’s also a good idea not to lock in any new deal too early, as better deals may emerge in the meantime.
Find out more – ‘Can you remortgage early?’
How long does remortgaging take?
The remortgaging process usually takes between 4 and 6 weeks if you are switching to a new lender and enlisting the help of a mortgage advisor and broker to ensure the process is smooth and speedy. This is because your new lender will need to undertake credit checks, an affordability check, the property valuation and legal work.
At Mortgage light, we can get you a remortgaging offer issued in as little as five days. If you are involving a third-party, such as Help to Buy or a Housing Association, then the process can take longer, perhaps up to 8-12 weeks.
If you were to switch to a new deal with your current lender (otherwise known as a product transfer), this is a much quicker process and can often be processed in as little as 30 minutes. This is because your current lender will already have much of your important information on file, and may not require you to undergo any new credit checks or affordability checks.
If you are not sure when the best time to remortgage is and you help finding your next mortgage deal, speak to us at Mortgage Light. We know the remortgaging process inside-out, so you’ll be in the most capable hands with us in your corner.
Pick up the phone and give us a call today on 01908 597655 or contact us via our website.