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A Guide to Remortgages in Derby: Top Reasons to Consider

Remortgage Advice feat Mortgage Advisor Wayne | MoneymanTV

Remortgage Advice in Derby

Your experience within the world of mortgages can be full of rewards. By the end of your process, one of the following options will apply to you;

  • You’ll have your dream home to settle down in and maybe one day start a family.
  • Perhaps you’ll have a property you can use to push you further up the property ladder in the future.
  • You’ll have an investment purchase that may provide some extra income.

Regardless of which of these was the desired route, eventually you will reach the end of your mortgage term and need to think about what comes next. At this point you will have a few different options;

  • You could sell your home and move into a bigger or smaller property.
  • You may wish to put your property portfolio up for sale and look for a different investment route.
  • The most common choice amongst our customers though is to take out a remortgage on their home.

What is a remortgage?

A remortgage is where you will utilise funds that have been borrowed from a new mortgage, to pay off your existing mortgage.

Those looking to remortgage in Derby will have a variety of different options to choose from, with both minor and much larger options available depending on the circumstances.

Remortgage for Better Interest Rates

Predominantly you’ll find that the initial mortgage deal you’re on will last for somewhere around 2-5 years, featuring lower fixed rates or even some rates that have been discounted.

Sometimes customers may even be placed onto a tracker mortgage which follows alongside the Bank of England’s base rate.

Most likely, the majority of customers will end up on their lenders Standard Variable Rate once their term has ended. This may be shortened to SVR online.

To give a brief summary, an SVR is a mortgage with an interest rate that is decided depending on what the lender wishes to charge, with the number subject to change.

This does not follow the Bank of England’s base rate like you would find on a tracker mortgage.

Because of how they work, Standard Variable Rates are typically the most expensive mortgage paths a customer can take, which is why many instead look at if they can remortgage for better rate.

In the long term this will hopefully save you some money on your mortgage repayments per calendar month.

Remortgage for Home Improvements

Remortgage for Home Improvements During Lockdown | MoneymanTV

A couple of years into your home residence, you may feel like you need something new, something more.

Perhaps you require an extra room or additional living space for your children or furniture, a remodelled kitchen, a new home office, or maybe even a loft conversion.

Rather than just moving into a larger house, a lot of homeowners release equity that exists in their home by taking out a remortgage once their term ends. Doing so can allow them to fund the costs of any home improvements they wish to see undertaken.

Project planning and managing these undertakings can be a little nerve-racking, especially when you also have to obtain planning permission to do any of these projects.

It’s worth noting though that many other homeowners would likely say that it’s a lot less stressful and more rewarding to modify the existing home you know and love, than go through the process of moving home.

At some point in the future, your plans could benefit you even more. This is because creating more space and having good quality craftsmanship has a good chance of increasing your properties value, something that is useful for if you ever do decide to sell up or rent out.

Remortgage for Changes to Your Term

We often find that the customers who contact us are also looking at their options to remortgage in Derby for a better mortgage term.

This can be achieved by reducing the length of the term they are on or switching to a more suitable and flexible mortgage product.

Reducing the length of your mortgage term means that you won’t be paying your mortgage back for as long as you otherwise would’ve, though it increases your monthly mortgage repayments.

The longer that your mortgage term lasts, the lower you’ll make your monthly repayments.

In some cases, customers may prefer to go for a more flexible mortgage term. Doing this may result in you having the option to overpay at a later date, which pays it off even quicker.

Flexible mortgages may also allow a homeowner to carry the same mortgage and rates over to another property, should it ever be necessary in the future.

The concept of a flexible mortgage sounds like it would be perfect for most customers, though they usually be taken out as a tracker mortgage, which as touched upon previously runs alongside the Bank of England base rate.

What this means is that your monthly mortgage payments could differ depending on the interest rate, making them a bit unreliable and inconsistent.

Equity Release

As property prices have risen since the 2007 market crash, most homeowners should have an amount of equity sitting in their property.

The amount of this can be worked out by looking at the difference between the remaining mortgage balance and the current property value.

As mentioned before, many homeowners will use a remortgage as a means to fund any home alterations they’re looking to make. There are still options out there beyond that though.

Some homeowners instead look to use it so that they can cover long-term care costs, provide a boost to their income, take a dream holiday, pay off an existing interest-only mortgage, or simply give them some extra cash to spend.

Every so often when customers get in touch, we’ll also find that some buy-to-let landlords in Derby will use equity release as a means of covering the deposit that they require to purchase further properties for their portfolio.

Remortgage to Consolidate Debt

Following on from the topic of equity release, it’s also important to talk about customers who use their equity to pay off any unsecured debts that they may have potentially accrued over time.

Though on the surface it may seem like a relatively simple concept, debt consolidation will not only take into account the amount of debt owed, but also the properties value and how your credit rating looks at that time.

The factors they look into may actually result in you being limited on how much you can borrow for a remortgage, depending on your personal and financial circumstances.

Further to this, if you are serious about using this to pay off your previous mortgage and your debts, you will need to borrow a greater amount than your outstanding mortgage. Chances are, this will increase your monthly mortgage payments.

None of this situation is particularly ideal, though at least you have the piece of mind that should you absolutely need the help, you have some options to choose from.

If credit rating is in quite a damaged state, there are still routes that you could take in order to find mortgage success. Please remember that these will not be easy and will require very specialist remortgage advice in Derby before you go ahead with them.

Even with a specialist mortgage advisor in Derby to help you out, there are no guarantees that obtaining a mortgage will be 100% possible.

Please always enquire with an experienced mortgage broker in Derby prior to consolidating and securing any debts against your main asset, that being your home.

Experienced Mortgage Advisors in Derby – Get in Touch

If you are a homeowner with a mortgage term that is reaching its end and are curious of what your options may be for remortgaging, we would absolutely suggest that you speak with an experienced and reputable mortgage broker in Derby like Derbymoneyman.

Your dedicated mortgage advisor in Derby will have a chat with you about your circumstances, creating a solid plan of action for the next step of your home owning journey.

We always our aim to ensure that the second journey through the mortgage process goes quicker and smoother than your first. Customer satisfaction is at the heart of what we do.

Derbymoneyman.com & Derbymoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited registered in England, registered number 6789312 and registered office 10 Consort Court, Hull, HU9 1PU.

© 2021 Derbymoneyman

Derbymoneyman – 19 St Christophers Way, Pride Park, Derby, DE24 8JY.

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