If you are currently in the process of a remortgage or perhaps are just deciding if you should have one, then you may have many questions about this. No matter what your situation is, knowing the ins and outs of remortgaging can be useful moving forward.
As a mortgage broking firm, one of the questions that we get asked consistently is whether you need to put down a deposit for a remortgage on your property.
In this blog post, we are going to be discussing some of the biggest questions many people have regarding remortgages as well as whether you truly need a deposit for a remortgage.
What Does Remortgaging Mean?
A remortgage is where you switch your existing mortgage over to another lender. The main goal is typically to get a better interest rate or to release equity from your home. It’s a financial move that allows homeowners to adjust the terms of their mortgage without selling their property.
Put simply, you are just taking out another mortgage on a property that you already own. When you do this, you will need to either take out a new loan with your current lender or find a new one entirely. It is important to note that your new mortgage will pay off your old one.
While this process can take some time, it is important to do everything thoroughly to make sure that you are not missing out any key pieces of information.
Do I Need A Deposit To Remortgage?
The main question we have briefly discussed is whether you need a deposit for your remortgage… Luckily, the answer is a fairly simple no!
Since you already own the property you are remortgaging, there is no need to put down another deposit for the new contract.
This can be a very relieving thing to hear for many people since the main issue that people seem to find when buying a new house is the hefty price for the initial deposit. This is one of the biggest advantages of a remortgage.
Why Might Someone Want To Remortgage Their Home?
There are plenty of reasons why someone might want or need to take out a new mortgage for their home – here are some of the potential reasons:
- To get a better interest rate – If market rates have dropped or the homeowner’s financial situation has improved, they may be able to secure a lower interest rate, reducing monthly payments.
- Current mortgage deal is ending – When a fixed-rate or introductory period ends, homeowners often remortgage to avoid moving to their lender’s higher standard variable rate.
- To borrow more money – Remortgaging can allow homeowners to release equity for home improvements, debt consolidation, or other major expenses.
- To change mortgage terms – Some may want more flexible features like the ability to make overpayments or take payment holidays.
- To take advantage of increased home value – If the property’s value has increased, the homeowner may be able to access better rates due to a lower loan-to-value ratio.
When Can I Remortgage My Property?
There can be some confusion as to how remortgaging works, with timings being a big issue. Most lenders typically allow remortgaging after you’ve been on the title deeds for at least 6 months. This is the standard waiting period for most conventional remortgage options.
However, there are some lenders who offer “day-one remortgage” options, allowing you to apply for a remortgage immediately after purchasing a property. These are more specialised products and may have stricter requirements.
You can start looking into remortgage options about 6 months before your current mortgage deal ends. This gives you time to find a new deal and avoid moving to your lender’s standard variable rate (SVR).
Can I Remortgage to Buy Another Property?
Another fairly common question is whether you can take out a remortgage to buy another property, and yes you can! This is another one of the great reasons why you may want to consider remortgaging your property.
The process involves refinancing your current mortgage to release equity. This equity can then be used as a deposit or to purchase the new property outright if it is sufficient. One thing that you should be aware of is the hefty monthly payments that are required with a remortgage.
Having these large payments alongside the payment for another property will set you back a lot of money, so this is a vital consideration to make before you make your decision.
Are Mortgage/Remortgage Rates Getting Lower?
The great news about mortgages for the future is that the rates of these payments are predicted to fall over the next few years, with some projections stating that 30-year mortgage rates could fall to between 6.5% and 7% by the end of 2024.
If you are looking to buy your first home in the coming years or even just looking to move out of the current house you live in, then this is surely encouraging news for the future!
How Can JG Mortgage Services Ltd Help You?
At JG Mortgage Services Limited, we pride ourselves on our personalised approach to each of our clients. We make sure that the experience you have with your mortgage or remortgage is as smooth and seamless as possible.
If you need any kind of support with your remortgage, may this be just some extra advice or for someone to fully take control of the process for you, we are happy to help in any way you see fit.
We can handle all of the complex aspects of paperwork and much more – so that you can rest assured that you do not need to worry about the logistics of your move. You can simply focus on the move, we will take care of everything else for you!
Key Takeaways
- Remortgaging is switching an existing mortgage for a new one, either with the same or a different lender.
- There is NO deposit required for a remortgage.
- The main reasons to remortgage are as follows: better interest rates, avoiding higher rates after your mortgage ends, lending more money for home improvements, changing to more flexible mortgage terms and taking advantage of increased property values.
- Generally, you can remortgage your property after around 6 months of ownership.
- Mortgage rates are expected to fall in the coming months, and even more in the next few years.
