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Refinance an existing UK mortgage
To clarify, mortgage refinance is very similar in principle to debt consolidation loans. That is to say, if you identify that your current mortgage has become disadvantageous to you, you can take out a different mortgage to pay off the first and establish better terms. What constitutes ‘better terms’ is entirely individual to you, and depends on what it was about your first mortgage that was disadvantageous.
There are three main reasons to refinance your mortgage:• Cashflow • Improved credit rating • Changes in interest rate Cashflow can be improved by mortgage refinance by negotiating longer terms in your refinance mortgage. That is to say, if you’ve got £50,000 left on your mortgage with monthly payments of £1,000, you could refinance to pay off the £50,000 at a rate of £800 a month. This would of course mean you end up paying more interest in the long run, but it’s a simple way to get more money in your pocket in the short term.
If your credit rating has improved since you originally took out your mortgage, you may be able to use mortgage refinance to get better terms. The worse your credit rating, the higher deposit you would have paid, and the higher the interest you would have been charged to counter the extra risk the lender took on financing your house purchase. If your credit rating has improved (which keeping up with your mortgage payments will have helped) you should be able to obtain a more favourable interest rate.
The third most common reason to refinance your mortgage is a change in interest rate. If you took out a variable rate mortgage and are now finding interest rates sky rocketing, you may be able to find a better deal. Similarly, if you took out a fixed rate mortgage while interest rates were higher, switching to a lower interest mortgage would save you a considerable amount of money over the medium to long term.
All in, although mortgage refinancing can be a part of solving financial problems, it can also be savvy financial management.
UAE Refinance Mortgage
Why utilise a broker?
Finding the right mortgage to refinance?
The first step in the process is to undertake a call or meeting with you where we will conduct a full fact find to understand your requirements further.
The second step is for us to analyse the information we have gathered in order to start filtering out the banks that are not applicable.
Based on the information we have collected, the research we have undertaken and the analysis of the products available we will then make a recommendation.
Types of Refinance mortgages available
Some banks and institutions will offer the ability to make overpayments free of charge and some even allow you to exit or pay off the mortgage without cost, however no single bank does it all!
In an ideal world it would be great to have a bank offer the lowest rate, the lowest costs and charges, however where a lender appears great in one aspect it could be less appealing in another. That is why it is very important to understand all of your requirements fully before making a recommendation. There is no point in recommending a low rate that comes with mandatory salary transfer if you are unable to transfer salary due to other loan commitments as an example!
The main types of mortgage when you consider rate are as follows:FIXED
A fixed rate mortgage is where the bank fixes the interest rate for between 1 and 5 years which protects the rate against fluctuation in the BOE Base rate or the LIBOR rate (depending on the bank).TRACKER
This type of rate consists of a fixed margin stipulated by the bank plus the prevailing BOE Base rate or LIBOR rate which changes daily (although most banks use a 3 month rolling average rate). If you believe rates will decline then tracker type products are normally a good option.VARIABLE
Some banks will offer a variable rate, an internal rate which is set by various internal departments within the institution. Although variable rates are no overly transparent, they can sometimes be cheaper than fixed rates.
Why not call us for a no obligation consultation to find out more