When taking out a mortgage, it’s important to review it regularly to ensure the terms are suitable for you and your ever-changing life. During a mortgage review, you typically have two options:
- Product Switch: Choose a new deal while staying with your current lender
- Remortgage: Transfer your mortgage to a new lender.
Throughout your mortgage term, you may remortgage to a new lender multiple times. This flexibility allows you to explore better rates, change your mortgage term, or access built-up equity e.g. for home improvements or debt consolidation.
In some cases, unforeseen personal changes may affect your ability to switch to a more competitive lender. Therefore, having the option to switch products with your current lender is vital. You are usually offered a new deal with the same lender if you’ve maintained your mortgage payments and adhered to the terms and conditions of the mortgage contract.
Whatever reasons you have for reviewing your mortgage, we suggest reaching out to us at A E Thomson Ltd to receive tailored mortgage advice that fits your requirements.
Allow us to search the market for the perfect mortgage, simplifying the process for you.
FAQs
What is the process of a mortgage review?
A mortgage review should not be too dissimilar to when you arranged your original mortgage.
Whether you are a new or existing client, we will take the time to understand your current situation, any changes since your last mortgage arrangement, and your plans.
Once we’ve established what you’re looking to achieve and obtained the required documents, we will ascertain whether you can achieve your goals with your existing lender, or if you’re better suited remortgaging elsewhere.
A mortgage review could be the perfect opportunity to take advantage of interest rate reductions, or pay rises, by shortening the term to repay your mortgage sooner, or using the equity in your property to fund home improvements.
However, if interest rates have risen, your income has reduced, or commitments increased, it could also be appropriate to increase your term to make your payments more affordable, or consider consolidating debts.
If you remortgage to a new lender, a new mortgage application is required, as well as a property valuation. Once your application has been approved you will receive a remortgage offer.
There is a small element of legal work required, to complete some basic legal checks, satisfy lenders mortgage conditions, and repay your existing lender with the funds. You will typically find the remortgage lender covers the cost of this, either by providing a free legal service or a cashback to contribute / cover the cost of instructing your own solicitor.
A product switch can be a more streamlined process as it usually doesn’t require a full application, or the involvement of a solicitor.
When should I review my mortgage?
The ideal time to review your mortgage is when you’re within 6 months of your existing interest rate expiring. Many lenders now offer product switches up to 6 months before the expiry date, and remortgage offers are usually valid for 6 months.
By reviewing your mortgage this early, it gives you the chance to secure a deal protecting you from interest rate fluctuations. This is crucial in a volatile market. At A E Thomson we help you secure a deal to protect you from rate volatility, however, we will also help ensure that if interest rates fall before your new interest rate / mortgage has started that we will switch you to the lower rate.
It’s important to know that you can review your mortgage at any time. There may be early repayment charges for ending a deal early but if circumstances have changed or if interest rates have reduced significantly, it’s a good idea to seek advice.
How long does a remortgage take?
A remortgage typically takes around 4-6 weeks from the initial application to the lender, to the solicitor being ready to confirm a completion date.
However, as per our guidance for reviewing your mortgage, we recommend putting a plan into place 3 – 6 months before your current deal expires.
This gives you plenty of time to secure a mortgage offer and complete the legal aspect alleviating time constraints.
What reasons might I remortgage?
It might be as simple as securing a new lower interest rate with another lender.
However, a remortgage can also be the opportunity to change the terms of your mortgage, or borrow more money.
Typically you can borrow additional money for the following purposes:
- Home Improvements
- Debt Consolidation
- Deposit for an onward purchase e.g. a Buy to Let or a Second Home
- Personal consumption e.g. a wedding, or a gift for family
- Repay the Help to Buy Loan
- Shared Ownership – Staircasing (buying a greater share)
- Let to Buy – switching your existing property to a Buy to Let