Remortgage Guide 2015

Your Free Guide to Remortgaging
Dont delay reviewing your mortgage!
Freephone 0800 953 0598
Phillip Cartwright
Managing Director
SECTION TITLE
MoneySavingExpert.com
Guide to
Remortgaging 2015
SECTION TITLE
CONTENTS
Foreword Independence and integrity
Whos this guide for?
Martins Mortgage Introduction
Why should I remortgage?
Who shouldnt remortgage?
Get ready to remortgage
Boost your chances of getting the best mortgage
Remortgaging if youre self-employed/a contract worker

What type of remortgage to choose?
Moving house
Dont forget the fees
How to get the best remortgage deal
Watch out for the hard sell on related products

Remortgage Q&A
FOREWORD
Independence and integrity

This guide is
written with
absolute editorial
independence
www.moneysavingexpert.com/mortgagebrokers
WHO IS THIS GUIDE FOR?
Whos this guide for?
People remortgaging their home
People moving home
www.moneysavingexpert.com/movinghome
Who this guide isnt for.

First-time buyers
www.moneysavingexpert.com/mortgageguide
Property investors
www.moneysavingexpert.com/buytolet
INTRODUCTION
Martins Mortgage Introduction

Its a no-brainer.
www.moneysavingexpert.com/brokers
CHAPTER 1
Why should I remortgage?
CHAPTER 1
Martins Mortgage Moment

Its tougher than it used to be
Decent equity.
A good credit score.
www.moneysavingexpert.com/moneymakeover
Continued overleaf
CHAPTER 1
Other reasons you may want to remortgage
It doesnt do what it said on the tin
CHAPTER 1
You want to borrow more
CHAPTER 1

Dumping other borrowings on your mortgage
Example:
CHAPTER 2
Who shouldnt remortgage?
The lucky ones on a great deal already
The unlucky ones locked in with penalties
CHAPTER 2
The ones whose timing is bad
Those who own 10% or less of their property
10
CHAPTER 2
Those whose equity has shrunk
The ones whose circumstances have changed
Those with a bad credit history
Those with a very small mortgage
11
CHAPTER 3
Get ready to remortgage

1. Will you be paying an early repayment charge?
working day after

2. Will you be paying a deeds release fee?
Dodge the charge

by remortgaging the
12
CHAPTER 3
3. How much do you owe your current lender?
13
CHAPTER 3
What will they lend to you?
How much equity will I need in my house?
Lenders look at your income
14
CHAPTER 3
Equity is equivalent to a
deposit for someone buying
Q. What counts as equity in my house?

The equity in your home
Can you put any other cash towards it?
From here on, for the sake of simplicity, lets just call it equity but really its about how
much in assets or cash youre putting toward the mortgage.
Q. How much equity do I need to get a good deal?
15
CHAPTER 3
Q. In the best buy tables it says LTV, not deposit

what does that mean?
LTV calculator
LTV
16
Equals deposit of
CHAPTER 3
Q. Can you drop an LTV band?
The effect of owning more of your home outright (equity)

Equity
10%
20%
25%
40%
house value of 150,000 on a capital repayment basis over a 25-year term.
There are two ways to drop an LTV band:
Do some research
www.moneysavingexpert.com/houseprices
17
CHAPTER 3
How to make sure the property is valued at least at your estimate
What if the property is valued at less than my estimate?
What if the property is valued at more than my estimate?
18
CHAPTER 4
Boost your chances of getting the best mortgage
Improve your credit score
www.moneysavingexpert.com/creditrating
19
CHAPTER 4
Quick tips
Get on the electoral roll

www.gov.uk/register-to-vote

Boosting your credit scores like going on the pull
20
CHAPTER 4
notice of correction
Break with past relationships
Build/rebuild your score
www.moneysavingexpert.com/badcredit
Time it right
Dont miss payments / pay late
Keep other applications to a minimum in the months before a mortgage
21
CHAPTER 4
Never withdraw cash on a credit card
Never apply after rejection
Again, please remember, these are just the tip of the iceberg. For a full guide to boosting your
credit score, go to www.moneysavingexpert.com/creditrating
Proving affordability
Youll need proof of income
Scrutinise your bank statements
22
CHAPTER 4
Be prepared to explain yourself
Work out your disposable income
Give yourself a Money Makeover
www.moneysavingexpert.com/moneymakeover
www.moneysavingexpert.com/comparerates
Help! I dont think Ill be accepted now
Warning!
Martins blog
23
CHAPTER 4
More tips to boost acceptance chances
An extra 100 can secure a mortgage
Stay out of your overdraft
www.moneysavingexpert.com/moneytransfers
Avoid payday loans like the plague
www.moneysavingexpert.com/payday
Close unused credit cards
www.moneysavingexpert.com/closeoldcards
24
CHAPTER 4
What paperwork will I need?
25
CHAPTER 5
Remortgaging if youre self-employed

or a contract worker
What youll need to get a remortgage deal
Business accounts.
Tax returns
26
CHAPTER 6
What type of remortgage to choose?
Choice 1: Repayment mortgage or interest-only?
27
CHAPTER 6

What? I cant get an interest-only mortgage?
www.moneysavingexpert.com/mortgagecalculator
What is an interest rate?
28
CHAPTER 6
How it works with mortgages
Repayment
Interest-only mortgages
29
CHAPTER 6
Choice 2: What type of deal do you want?
Fixed-rate mortgages
PROS & CONS OF FIXED RATES

PROS
CONS
30
CHAPTER 6
Variable-rate mortgages
www.moneysavingexpert.com/boi
31
CHAPTER 6
PROS & CONS OF TRACKERS

PROS
CONS
PROS & CONS OF SVRs

PROS
CONS
32
CHAPTER 6
PROS & CONS OF DISCOUNT RATES

PROS
CONS
33
CHAPTER 6
PROS & CONS OF CAPPED DEALS

PROS
CONS
34
CHAPTER 6
Continued overleaf
35
CHAPTER 6
Choice 3: Do you want your mortgage to be flexible?
Making overpayments
Loan:
150,000 over 25 years at 5%.
Monthly payment:
880
Total amount repaid:
263,000
This means youd pay 113,000 in interest. If you decided to and were allowed to overpay
by 100 a month, youd repay the mortgage four years and seven months quicker, saving
23,350 in interest.
www.moneysavingexpert.com/overpaymentcalc
36
CHAPTER 6
Timing your overpayment
37
CHAPTER 6

Why overpaying pays so well
38
Are you allowed to overpay?
Do you have other debts?
Do you have a cash emergency fund?
Does it have a borrow back facility?
CHAPTER 6
Can you take payment holidays?
Some lenders insist you

have overpaid before you
39
CHAPTER 6
Offsetting
40
CHAPTER 6
Is it worth it?
Current account mortgages
Warning!
41
CHAPTER 6

Watch out for early repayment charges
How long should I set the term for?
42
CHAPTER 6
Questions to ask
Am I free to move after the deal ends?
43
CHAPTER 6
What happens if I need to move house within the mortgage term?
Is the mortgage available for remortgages?
Do I meet the lenders borrowing criteria?
44
CHAPTER 7
Moving house
I want to take my current mortgage product to a new house
45
CHAPTER 7
My mortgage is portable. Can I definitely take it with me?
How much will the lender let me port?
I cant or dont want to port, so I need a new homemover mortgage
www.moneysavingexpert.com/mortgageguide
46
CHAPTER 8
Dont forget the fees
Booking or reservation fee
47
CHAPTER 8
Is it worth remortgaging?
Add up the cost of staying put
Add up the total new deal cost
48
CHAPTER 9
How to get the best remortgage deal
Where to start?
First of all, ask your current lender what it will offer
49
CHAPTER 9
Then, ask your bank account provider too
Using a broker
What is a broker?

Mortgage brokers can make it easier and faster
50
CHAPTER 9
The key questions to ask a broker
1. Do you check all the lenders?
51
CHAPTER 9
2. How will you make your money?
52
CHAPTER 9
www.unbiased.co.uk
Step 1
Choose a broker
Step 2
Discuss your circumstances with the broker
Step 3
Check direct-only deals
Step 4
Select a mortgage/accept the brokers recommendation
to the lender
Step 6
Valuation and legal work
Step 7
Completion
53
CHAPTER 9

Always check non-broker deals too
broker market. Many people go ahead in getting a remortgage knowing very little
(without reading a guide like this) and brokers at least stop people making mistakes.
Far better in my view that theres an active, regulated, broker market to help.
54
CHAPTER 9
Going solo
www.moneysavingexpert.com/mortgagebestbuys
Step 1
Select the remortgage deal or deals you fancy
Step 3
Work out the cost over a set period
Step 4
Check you and the property are eligible before starting the application
process by contacting the lender
Step 5
If you decide to go ahead, apply to the new lender
Step 6
Valuation and legal work
Step 7
Completion
There are a few

deals that brokers
55
CHAPTER 10
Watch out for the hard sell on...

Life cover from your mortgage seller
www.moneysavingexpert.com/lifeinsurance
Mortgage payment protection insurance (MPPI)
56
CHAPTER 10
Buying MPPI from your mortgage broker
www.moneysavingexpert.com/mppi
Bundled buildings / contents insurance
www.moneysavingexpert.com/homeinsurance
57
CHAPTER 11
Remortgages quick Q&A

Q. Will the lender lend on my property?
58
CHAPTER 11
Can I leave my
property and rent it
out to someone else?
Q. What is the mortgage APR?
Q. Can I leave my property and rent it out to

someone else?
59
CHAPTER 12
Final thought
Happy hunting!
60

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Your Free Guide to Remortgaging

Dont delay reviewing your mortgage!

Freephone 0800 953 0598

Boost your chances of getting the best mortgage

Remortgaging if youre self-employed/a contract worker

Watch out for the hard sell on related products

Independence and integrity

WHO IS THIS GUIDE FOR?

Whos this guide for?

People remortgaging their home

People moving home

Who this guide isnt for.

Martins Mortgage Introduction

Why should I remortgage?

Martins Mortgage Moment

A good credit score.

Other reasons you may want to remortgage

It doesnt do what it said on the tin

You want to borrow more

Martins Mortgage Moment

Who shouldnt remortgage?

The lucky ones on a great deal already

The unlucky ones locked in with penalties

The ones whose timing is bad

Those who own 10% or less of their property

Those whose equity has shrunk

The ones whose circumstances have changed

Those with a bad credit history

Those with a very small mortgage

Get ready to remortgage

working day after

Dodge the charge

3. How much do you owe your current lender?

What will they lend to you?

How much equity will I need in my house?

Lenders look at your income

Q. What counts as equity in my house?

Can you put any other cash towards it?

Q. How much equity do I need to get a good deal?

Q. In the best buy tables it says LTV, not deposit

Q. Can you drop an LTV band?

The effect of owning more of your home outright (equity)

house value of 150,000 on a capital repayment basis over a 25-year term.

There are two ways to drop an LTV band:

How to make sure the property is valued at least at your estimate

What if the property is valued at less than my estimate?

What if the property is valued at more than my estimate?

Boost your chances of getting the best mortgage

Improve your credit score

Get on the electoral roll

Martins Mortgage Moment

Break with past relationships

Build/rebuild your score

Dont miss payments / pay late

Keep other applications to a minimum in the months before a mortgage

Never withdraw cash on a credit card

Never apply after rejection

Youll need proof of income

Scrutinise your bank statements

Be prepared to explain yourself

Work out your disposable income

Give yourself a Money Makeover

Help! I dont think Ill be accepted now