What is remortgaging?
If you are buying your home with the help of a mortgage, a careful review might reveal that there are other mortgages available which offer a lower rate of interest, over a given number of years, and other terms which appear more favourable than the mortgage you are currently paying.
In that event, you might decide to pay off your current mortgage early by arranging a further, alternative mortgage advance – this is the process known as remortgaging.
If you already own your home outright – that is to say it is currently “unencumbered” or used as security against a mortgage – you might decide to use that equity to secure a loan. Such a loan is also known as a remortgage, even though you might not previously have had a mortgage on the property.
Do I need independent financial advice before remortgaging?
There is no legal requirement for you to seek the services of an independent financial advisor before deciding to remortgage your home.
However, the informed, expert judgment of such an advisor may play a big role in making your decision as safe, secure and well balanced as such a potentially long-term financial commitment as a remortgage may involve – if you end up with a mortgage on which you discover you are unable to keep up the repayments, of course, your very home may be at risk.
How may I find an independent financial adviser?
Independent financial advisers – including independent mortgage brokers – are authorised and regulated by the Financial Conduct Authority, which gives advice about ways in which you might find one.
Enhanced Wealth remortgages are an example of specialist brokers whose focus is on serving the customer and helping him or her to find a remortgage product that suits their individual circumstances and lifestyle at a competitive rate of interest.
How may an independent mortgage broker help me?
An independent mortgage broker has a detailed, expert knowledge of the mortgage market.
This expertise is applied entirely on your behalf – the advice is genuinely independent – to ensure that your best interests are served.
An independent mortgage broker is able to ask the questions that help to build up the detailed picture of whether a remortgage might be suitable given your particular, individual circumstances. If it is, then the broker applies his intimate knowledge of the market to identify those mortgage products which might be suitable for you – often including those products which might not be immediately available on the high street.
In addition to the structure and form of the remortgage that might be suitable for you, the independent mortgage broker is also interested in helping you with the sometimes complicated maths involved in comparing the cost of your existing mortgage with any alternative remortgaging arrangement.
This involves calculating what you are currently paying in mortgage interest each month and multiplying this by the number of years until the end of the loan’s term. This represents the current cost of your mortgage.
To test whether a remortgage might be worthwhile and represent good value for money, the cost of your current mortgage is compared to the cost of an alternative advance – the amount of interest paid each month, over the number of years the loan is to be borrowed, but also with the addition of those costs associated with arranging the remortgage. These additional costs typically include legal fees, survey fees (of the property used to secure the mortgage) and any exit fees payable to your current lender upon repayment of the mortgage before it reaches full term.