What is a remortgage?

A remortgage is the act of switching your existing loan to a remortgage product with another lender?

Why should you consider this? If you are tied in with a lender for a certain period of time, then when that period of time ends, you will then go on to that lender’s standard variable rate. For example, you take out a 3 year fixed deal, 3 years later, you may now find yourself on Standard Variable Rate. This follow-on rate is NOT fixed, which you may be uncomfortable with and typically, the variable rate, will be higher than the rate you were on during your tie-in period.

Here are some common reasons why people remortgage:

• To save money on monthly payments

• To raise money for home improvements

• For an extension or a loft conversion rather than moving, to avoid paying stamp duty

• You may want to explore consolidating existing debts

• To pay for school fees

• To buy a car

• Divorce/Separation – needing to raise cash or buy an ex-partner out Any purposes not accepted for remortgage capital raising? Generally lenders do not accept remortgages for capital raising to pay tax owed, or to clear gambling debts.

“…but won’t my existing lender write to me when my existing deal is coming to an end?” Yes, most likely. However, your lender can only offer you products from their existing customer range. If you want to look at mortgages from a large and comprehensive panel of lenders, then please contact me at www.fdfinancial.co.uk. Typically, it pays to shop around rather than staying with the same lender.