Your guide to remortgaging

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1 Mortgages Need more information? Speak to one of our mortgage advisers who wi be happy to expain more about our range of mortgages. Ca: (Monday to Friday 8am to 6pm) Cas may be monitored and recorded for training and security purposes Or visit us onine: Or ca into one of our branches. Your guide to remortgaging Advice on when to remortgage, things to consider when remortgaging and top tips. YOUR MORTGAGE WILL BE SECURED ON YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Newcaste Buiding Society Principa Office: Portand House, New Bridge Street, Newcaste upon Tyne, NE1 8AL. Newcaste Buiding Society is authorised by the Prudentia Reguation Authority and reguated by the Financia Conduct Authority and the Prudentia Reguation Authority. Newcaste Buiding Society is entered in the Financia Services Register under number You can check this on the Financia Services Register or by contacting the Financia Conduct Authority on Ca or visit us onine (October 2017) DEV085 newcaste.co.uk

2 This guide has been produced for anyone who aready has a mortgage and is considering moving their mortgage to a different ender, without actuay moving home. This process is caed a remortgage and our guide aims to expain the various things you shoud consider when ooking to remortgage, heping you make an informed choice. Why Remortgage? There are many reasons why remortgaging coud make sense for you - but the main one is simpe - saving money. Save Money Most mortgages offer an introductory dea; either a fixed, tracker or discounted rate for a specific period of time which is usuay between two and five years. The most common time to remortgage is when these deas come to an end as you may be moved onto your current ender s Standard Variabe Rate rather than other rates avaiabe. Your current ender may offer aternative mortgage deas, you shoud discuss your options with them first as it s aways easier to stay with your existing ender. By switching your mortgage to another ender you coud take advantage of a better interest rate, which coud save you money in the ong-run. However pease bear in mind that remortgaging isn t aways a free process and you need to factor in a the costs and fees invoved to ensure this is the right option for you. To Raise Money A remortgage can not ony save you money with a better mortage dea but may aso hep you borrow more for home improvements if you have enough equity in your home for exampe. Every mortgage ender wi have different ending criteria and imits on how much you can borrow against your property. This is caed the Loan to Vaue (LTV). 2 newcaste.co.uk newcaste.co.uk 3

3 Fexibiity to suit your changing needs. Remortgaging may aso be about getting a mortgage which is right for you and your current circumstances. Your circumstances may have changed, and may incude; marriage, birth of a chid, inheritance, divorce or a change in your empoyment and you may need more fexibiity. You may fee you can afford higher payments and wish to overpay in order to repay your mortgage quicker or you may want to reduce/increase your mortgage term. There are a whoe range of mortgage options to choose from, a offering different features and benefits so you re sure to find the right one to suit you. How much do you owe your current ender? You wi need to have this information at an eary stage of your research to enabe you to budget and to understand how much you need to remortgage for (incuding any other costs such as fees). You can request this information from your current ender. Simpy give them a give a specific date of when you d ike to switch your mortgage and they wi give you an exact figure. This way you don t end up taking more or ess than you need to. Aternativey this information is provded on your annua mortgage statement. Things to consider when remortgaging. Before you start the remortgaging process, there are a number of things you shoud consider. Check your current mortgage dea and ensure you fuy understand its terms and conditions. Some mortgages incude an Eary Repayment Charge. Which means if you choose to pay your mortgage off eary, there coud be a charge to do this. This wi be on the documentation suppied during and after your appication. Once you have this information you be abe to work out whether it s worth eaving your current mortgage eary and paying the charge. You may wish to avoid the charge by moving to a new dea with your current ender once your current dea comes to an end. Other possibe charges may incude redemption charges, soicitor fees, or a deeds reease fee when repaying your mortgage. 4 newcaste.co.uk newcaste.co.uk 5

4 Top Tips for Remortgaging... What do you want from your new mortgage? As mentioned earier, you may want something more fexibe to fit your circumstances or perhaps you re concerned about interest rate changes, or you may be expecting a change in your persona finances? There are thousands of mortgages to choose from, offering different features and benefits however the main ones fa into the foowing categories; Standard Variabe Rate - the interest you pay on the mortgage can vary depending on the interest rates the mortgage ender dictates. This coud go up as we as down and a ender can change their variabe rate at any time. This is the rate which most oans revert to after a fixed/discounted or tracker rate period ends. The advantage is that you can repay your mortgage at any time and have the fexibiity to overpay. Fixed Rate - the rate of interest stays fixed unti a set date, meaning your monthy payments remain the same throughout the period no matter what happens to interest rates in genera. The advantage is you know exacty how much you wi have to pay each month so you can budget more easiy. Discount - These mortgages come with an initia discounted period which means you pay a ower rate initiay before the rate increases to an agreed rate. Pease note the rate coud go up as we as down as these mortgages are usuay inked to the ender s Standard Variabe Rate. The advantage is that you can make the most of a ower initia rate meaning you may have more to spend on your home. Base Rate Tracker - these are a variabe rate mortgages but are inked to the Bank of Engand base rate, and track the rate by a certain percent which is usuay above the Bank of Engand base rate. If the rate increases, then your payment wi increase, however if the Base Rate fas the advantage is you wi benefit from a reduction in your monthy payment. Offset - these combine a traditiona mortgage with any deposit accounts, such as savings and/or a current account. This means you can offset your savings against the vaue of your mortgage baance. This offsetting coud save you money and reduce the term of your mortgage. Give your current ender the chance to offer you a better dea it coud be simper and cheaper Start researching your options before the end of your current dea period Be aware that the process can be time consuming it may take severa weeks to compete. Before you switch be sure you factor in a costs there may be costs of remortgaging, which may incude ega, vauation and administration fees. Don t just compare interest rates ook at the whoe package incuding fees. It may be cheaper to go for a product with no fees rather than one with ower interest rates. 6 newcaste.co.uk newcaste.co.uk 7

5 How much can I borrow? Frequenty asked questions You need to consider how much you can afford to pay each month and how ong you require the mortgage or the specific mortgage dea for: Every ender wi have their own ending criteria which is usuay based on your income, outgoings & disposabe income, your credit rating and the amount you want to borrow against the vaue of the property. Many enders offer an onine mortgage payment cacuator to hep you cacuate and compare the repayments over different products, rates and periods. You can find ours at: These hep to give an indication of your payments, however it s best to tak to a mortgage adviser who wi provide you with a Key Facts Iustration (KFI). This gives you a the information you need to know about the remortgage and is standardised across a enders making it easier for you to compare ike for ike. Repayment Mortgage This invoves paying back the interest on the amount borrowed as we as paying off the capita borrowed. At the end of the mortgage term you wi know that you have repaid a the interest and the capita, so you wi own your home outright. Interest Ony Mortgage By seecting an Interest Ony Mortgage, you wi ony pay interest on a monthy basis and not reduce the capita baance of the oan. You are responsibe for ensuring you wi be abe to repay the capita at the end of the mortgage term. Why not give us a ca on to speak to one of our mortgage advisers. What are the potentia costs? There may be severa fees when it comes to remortgaging so it s important to ensure you understand what you need to pay upfront. These costs may incude: Vauation fee Reservation fee Arrangement fee Lega fees Broker fee. As aready mentioned there coud aso be an eary repayment charge on your current mortgage as we as an exit fee. Often enders wi incentivise you to switch to their product by offering free vauations and ega fees so it may work out cheaper to go for one of these products than to go for a cheaper rate. It s worth shopping around and comparing a the options avaiabe. Make sure you get a fu redemption cost from your current ender and thoroughy check the KFI of any new mortgage which wi detai the product costs invoved. Check out Newcaste Buiding Society s range of mortgage deas for customers re-mortgaging at: What paperwork wi I need to provide? If you are remortgaging with another ender the paperwork wi be simiar to when you appied for your first mortgage. You wi usuay need to provide: Detais of the property. Detais of your bank account Proof of identity (passport or driving icence) Proof of address (counci tax or utiity bis) Proof of empoyment Proof of your financia situation Income - pay sips, P60, accounts if sef empoyed) Outgoings - Debts, oans bank statements Assets - Investments, other properties, accounts. How ong wi it take? The remortgage process can take between 4 to 8 weeks on average to compete. Do I need to move house to remortgage? No, you don t need to move house to remortgage. Can I remortgage to free up money for home improvements? Many peope do borrow more to improve their home as the added benefit is that you may increase the vaue of your home in the ong run, but this is never guaranteed. 8 newcaste.co.uk newcaste.co.uk 9

6 Frequenty asked questions Can I remortgage to hep with debt repayments? If you have severa debts and are strugging with repayments, you may choose to remortgage in order to obtain the money to cear these debts. However, as you may be securing previousy unsecured debts onto your property your home wi be at risk if you fai to keep up repayments on your mortgage. This woud be subject to each enders poicy. Can I remortgage more than once? In theory, you can remortgage as often as you ike. However it s important to cacuate fees and charges to make sure it s worthwhie. Newcaste Buiding Society has been heping peope buy their home for over 150 years. We have a range of mortgage options avaiabe whether you re a first time buyer, or thinking of remortgaging. If you are considering buying a property or remortgaging pease give us a ca on and we be happy to chat through your options. 10 newcaste.co.uk newcaste.co.uk 11