Re-mortgaging your home

What does re-mortgaging mean?

When you change your current mortgage for another mortgage deal, either because your current deal has come to an end or to release some of the equity in your home, then this is called re-mortgaging.

In recent years more and more people have been looking to re-mortgage. Yet, with a whole range of different mortgages out there it can be extremely confusing. That's where this quick guide comes in handy, to give you the information you need. It could help you save on fees, reduce the hassle and make transferring your mortgage a lot easier.

Why re-mortgage?

The most popular reasons for re-mortgaging your present home are:

1. Saving money

If you have a mortgage you could benefit from re-mortgaging to a new product and/or lender to reduce your monthly repayments.

2. Raising extra money

Re-mortgaging could allow you to access this extra money enabling you to make home improvements, take a special holiday or buy a car.

3. Reducing the length of the mortgage term

Many homeowners may be able to afford higher repayments now compared to when they took out their original mortgage. Re-mortgaging could allow you to change your product to increase your flexibility to make larger monthly payments, which will in turn reduce the length of the loan.

4. Switching from an unsatisfactory lender or product

As circumstances change, so can your mortgage needs. Re-mortgaging could allow you to take out a new mortgage product that is more suitable to your current situation.

How do you go about re-mortgaging?

Like your first mortgage, deciding to re-mortgage shouldn't be an impulsive decision. There are many different factors to consider. For some individual's it simply won't be worth re-mortgaging and this could be due to any number of reasons. The most common reasons are:

• Your current mortgage deal is a very good one and you can't get better elsewhere.
• You are currently locked into you current mortgage deal and it would cost you too much to switch.
• You have a relatively small mortgage that the savings you would make by switching would be negligible.

For the rest of us - there could be great savings to be made.

Things you should consider

1. Is your current deal still suitable?
The first step is to dig out the terms and conditions of your current mortgage. Ask yourself what type of deal do you currently have? Is it still what you need? Remember there are many different types of mortgages out there and now you are thinking about re-mortgaging you may not need the same type as you did when you first took out your mortgage.

2. Find out about the products available
Now that you know what types of mortgages there are and have a clearer idea as to which one/s are for you, step 2 is to do some research of the products that different lenders are currently offering. Obviously the more you investigate, the more informed you will be but below are some of the issues to think about whilst you are shopping around.
The first thing to consider is obviously the rate you would be charged with your new mortgage. If you find a product you are particularly interested in, get a quote either online or by calling the provider. All providers will issue you with a 'Key Facts Illustration' document, which will highlight all the costs associated with the product.

3. So other than the rate, what other things should I consider?

• Look out for lenders offering special incentives like free legal costs and free survey fees, these could help you to keep you costs low.

• How flexible is the product?

• Can you overpay each month to reduce your mortgage if you have sufficient funds?
• Can you underpay if you have a life-changing event?
• Can you take a payment holiday?
• Can you take the mortgage with you if you want to move house?

• Is there an early repayment charge on your current mortgage deal? Would you have to pay a penalty for paying off your mortgage early?

• Do you have to take out any conditional insurance as part of the mortgage? Buildings and Contents, Personal Insurance or Mortgage Payment Protection Insurance?

If you have any other queries about any element of any particular mortgage, make sure you check it out. In the first instance speak to the provider concerned (but remember lenders will only give you advice about their own products) or secondly for a whole market view you could speak to an independent broker (please note many brokers don't charge a fee but make sure you are clear before you start using their services).

4. Use our table to check your deal

So you've found a mortgage product that you think will save you hundreds of pounds? But how can you be sure? Use our table to check.