What is a remortgage?

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Remortgaging is when you look to move from one mortgage deal to another, either staying with your existing lender or moving to a new one. As the years go by, you don’t necessarily have to stay on the same mortgage as the one you initially took out, as your personal circumstances will change over time, giving you reasons to remortgage.

Why do people choose to remortgage?

It’s always important to review your finances from time to time, consider your options and know that you’ve got a mortgage that fits your individual circumstances and needs.

Much like renewing your car insurance or shopping around for a good broadband deal, there will often be other mortgage rates out there that may be more suitable for you, and the process of changing this is called a remortgage.

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Some additional reasons that many choose to remortgage:

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• Taking advantage of lower interest rates

• The current fixed rate mortgage deal is up for renewal

• Looking to move from an interest-only mortgage to a repayment mortgage

• Looking to be able to make overpayments

• Seeking to borrow money for projects such as house renovations

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Many mortgages will have an initial period of fixed rates, which expires generally after either 2, 3 or 5 years, after which you would revert to a Standard Variable Rate (SVR) and end up paying a higher rate than you previously enjoyed. This is one of the most common reason homeowners choose to seek a remortgage.

Of course, a mortgage is likely to be the biggest financial commitment you’ll ever make, so there’s a few things you should consider before taking the plunge and seeking to remortgage.

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If you’ve spotted a new deal out there, there’s a few things to check:

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• Check if your new lender is offering a fee-free mortgage or if there’s a hefty product fee that could counteract some of the savings you’d make by remortgaging.
   

• Look at what early repayment charge you may have on your current mortgage that needs to be paid off before switching to a new deal.
   

• Check the small print to see if there are fees for your new mortgage – arrangement fees, valuation fees and booking fees, for example, and factor these costs into your calculations.
   

• Make sure you’re ready for a mortgage – similar to when you first applied for your current mortgage, it’s important to have a good credit score and financially be in good condition, as there may well be similar checks undertaken as for a first-time mortgage.

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Product transfers

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Sometimes, if you don’t wish to borrow any more money and are simply looking for a ‘like-for-like’ mortgage on a new rate, then you may be eligible for a ‘product transfer’.

This is where your existing lender can offer you a range of alternative mortgage products to choose from in place of your existing deal. The benefits of this route are that it’s often simpler and faster to change products with the same lender, however the downside is that it’s not always clear that you are getting the most suitable deal, so it would be valuable to take professional mortgage advice to assess your individual needs and circumstances.

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Is there anyone who shouldn’t remortgage?

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For those seeking to remortgage as a means of saving money or to get a better deal, be aware that for some, it is not always in their best interests, and sometimes your existing mortgage deal may be better than what you can find out there now. It all depends upon money, timing and personal circumstances.

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• You already secured a great deal at the time – that nothing out in the market today can complete. With the market always changing, it would be a good idea to speak to us to help you with your options.
   

• Your existing mortgage locks you in – which often charge a fee called an early repayment charge if you decide to move before your fixed period has ended.
   

• You own less than 10% of your property – if you need to borrow more than 90% of the current value of your property, you may struggle to find competitive mortgage deals. There are 95% mortgages increasingly available, however these tend to be aimed predominantly at buyers purchasing property rather than remortgaging.
   

• Your equity has shrunk – in some cases where the value of your property has fallen since purchase then this can cause challenges. For example, you had a 10% deposit when buying your home, borrowing the remaining 90%, if the overall value has fallen, then the amount you owe is a bigger proportion.
   

• Your circumstances have changed – if your financial position has altered since your current mortgage was taken out, perhaps one of you have stopped working, you became self-employed, or your income has fallen. New lenders may not be prepared to offer you a loan as you no longer fit their criteria.
   

• You have a poor credit history – since taking out your first mortgage, if your credit score has worsened, with any missed credit card, mortgage or utility payments, or loan defaults, then it will be more difficult to remortgage. In recent years, lenders have become more wary of the risks and selective of who they lend to.
   

• You have a very small mortgage – once your loan falls below a certain amount, for example £50,000, it may not be economic to switch lender, simply as you are less likely to make a saving if the fees are high. The smaller the mortgage you have, the larger the effect of any fees you pay to remortgage are, especially given that most new mortgage deals have a four-figure fee attached.
   

• You are very close to the end of your mortgage term – for borrowers at the very end of a long mortgage term, the costs of switching lender may be expensive and not worthwhile, and it may be worth comparing costs to that of a brand-new mortgage when required.

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For those reasons, it pays to do some research into your current mortgage terms, to examine whether you are best off not making any changes unless your circumstances make it essential to do so.

Getting ready to remortgage

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Check how much you currently owe on your existing mortgage, you can either do this yourself using the documentation supplied by your lender, or we would be able to help you with this as part of the advice we give.

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• Plan ahead – allow up to six months for a remortgage to take place, this gives adequate time to undertake research and decision making for what you’re looking for alongside the process of applying for a remortgage itself.
   

• Plan your finances – just as for applying for your first mortgage, it pays to make sure your finances are truly in order. Check your credit score, don’t apply for any new credit, avoid any large purchases, avoid any payday loans or overdrafts at all costs to boost your chances of quick acceptance for a remortgage.
   

• Plan for the application – much as for your first mortgage, the remortgage process normally requires presentation of a range of documents to prove income and identity, so it is wise to have your documentation in order and ready for when your mortgage adviser or lender requests, to allow your application to proceed without delay.
   

• Self-employed applicants are required to provide additional proof of income, with up to three years history. The ability to show future workload and incoming revenue stream will aid your application, alongside a good credit score.

 

Seek professional advice

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We’re ready to assist you in finding a new mortgage – with so many different deals available and lots of intricate elements to take account of, it makes sense to book an appointment with us to guide you on the next steps. We have access to thousands of deals from across numerous different lenders, many with exclusive rates you may not otherwise be able to find.

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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There may be a fee for mortgage advice.

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The hidden costs of moving

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It’s always enjoyable scrolling through listings of properties for sale – whether you’re after expansive dream houses and country boltholes through to sharp urban living or seeking a wholesome family slice of suburbia. There’s one thing in common however – the price you see is not the price you pay.

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The average cost of moving is almost £9,0001 and includes many things you’d not normally expect to budget for. One of the biggest considerations to bear in mind is whether you already have a mortgage – if you can’t move it across to your new property, there can be a heft early-repayment charge.

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Factor in costs for estate agent fees, surveyors, Stamp Duty, conveyancing, and removal costs, and it soon stacks up. Fortunately, we’re here to help guide you through the process of moving home with both eyes open. We’ll look at your exact circumstances, and provide our advice, making you aware of the costs and pitfalls, using our tried and tested experience.

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As mortgage advisers, we’ll help you finance the home of your dreams, and by being able to access a wide range of lenders from across the market, you’ll be assured you are getting a suitable deal. Contact us today to let us help you on your journey.

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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There may be a fee for mortgage advice.

 

11Source: ‘Cost of Moving House’ Compare My Move, 2021, https://www.comparemymove.com/house-removals/cost-of-moving-house-calculator

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How Much Stamp Duty Will I Pay?

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With the excitement of buying a new home, it can be easy to overlook some of the big payments you may have to make as part of the process.

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Here we help explain how you can calculate the Stamp Duty you might have to pay when you move home.

 

On 23rd September 2022 the initial zero rate stamp duty threshold was increased from £125,000 to £250,000.

In the 2024 Autumn Budget the surcharge for additional property was increased from 3% to 5% effective from 31st October 2024.

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In Scotland, there’s a slightly different policy, but the concept is the same – it’s known as Land and Buildings Transaction Tax, or Land Transaction Tax in Wales.

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There’s an easy way to find out how much tax you might have to pay on your property sale – simply take a look at these Government calculators for your respective country of residence.

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Please be aware that by clicking on to the following links you will be leaving www.goodlifemortgage.co.uk website. Please note that Good Life Mortgage nor HL Partnership Ltd are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

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· England & Northern Ireland: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro

· Wales: https://gov.wales/land-transaction-tax-calculator

· Scotland: https://revenue.scot/calculate-tax/calculate-property-transactions

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(These links are correct as of November 2024. Please visit the official government sites for up to date information).

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We advise on a wide range of topics when helping you move home, so speak to us to get a clearer picture.

Book an appointment today.

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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There may be a fee for mortgage advice.

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5 Top Tips for Selling your Home

 

Small changes can make a big difference when it comes to selling your home. Follow these tips to make your house as attractive as possible for prospective new buyers.

 

1. Increase kerb appeal

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First impressions always count – from the outside, tidy the garden, weed the driveway and jetwash the patio – repair damaged fences and clean your windows before any viewings.

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2. Choose neutral colours

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It’s a classic – keep your colours subtle to increase the appearance of space and help buyers visualise them making their own mark upon the property. You can still inject some warmth with choice accent colours on soft furnishings such as cushions and rugs.

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3. Clean & de-clutter your property

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Give your place a spring clean and tidying away unsightly items in cupboards to help create more space and make it easier for potential buyers to think about how they can see themselves living there.

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4. Consider the time of year

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It’s challenging to make a house look as attractive in Winter as in other times, so think about holding on if you can – improved weather, brighter days and plants in bloom can give your place a natural makeover.

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5. Presentation

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Last-minute care and attention to the little details before estate agents come to take photos or potential buyers arrange a viewing can pay big dividends. Turn your lights on, ensure beds are made, curtains are tied back and kids toys are tidied away. Conceal pet beds & toys, and tactically place fresh flowers and air fresheners to increase the appeal for visitors.

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