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 Remortgage Guide If you are considering re-mortgaging it would be sensible to contact your existing lender to obtain a redemption statement. This will show you not only your current mortgage balance but also detail any penalties or charges they intend to levy. It may mean that by waiting a few weeks until your "tie-in" period ends, you could avoid paying thousands of pounds in early redemption penalties. Re-mortgaging in simple terms involves you moving your mortgage from one lender to another. It may be at the same time that you wish to combine this with one of the following: - * Buying out a partner and transferring the property into your sole name. * Raising additional funds. * Combining both a mortgage and secured loan into one new mortgage. * Consolidating debts. * Taking advantage of a new attractive fixed or variable rate. Berkley Vittoria handle thousands of re-mortgages and can guide you through the whole process. We can utilise our vast experience and technology to source the most suitable scheme for your own individual requirements. We will then handle all the paperwork either by visiting you in person or by post. Our experience simplifies the whole process - it really can be as easy as just signing a few forms. The Re-Mortgage process is as follows: - * Contact Berkley Vittoria and tell us your requirements. * Berkley Vittoria will source the most suitable mortgage to match your individual needs. * Berkley Vittoria will complete all the necessary paperwork. * The new lender will arrange a mortgage valuation on your property and take any references they require. * The new lender will issue your mortgage offer. * Your solicitors in the meantime will arrange searches and obtain final redemption figures. They obtain signatures from you on the relevant Building Society forms. * Your re-mortgage completes and your new mortgage commences. Before entering into a re-mortgage you should consider all possible costs involved i.e. Legal Fees, Valuation Fees, Arrangement Fees, Deed Release Fees, Telegraphic Transfer Fees, Early Redemption Penalties and Indemnity Guarantee Premiums. Many re-mortgage schemes will offer financial help to cover the cost of many of these fees. It is important to ensure the amount you borrow covers all of your costs and leaves you with the surplus funds you require. Some re-mortgages will qualify for lenders Fast Track Schemes, whereby no proof of income or other references will be required by the lender (they will only need a satisfactory valuation to be carried out). Other re-mortgages will require more comprehensive paperwork, however we will guide and assist you through the whole process. If you are dissatisfied with your lender or the rate they are charging you, a re-mortgage could be the solution. By contacting us and answering a few basic questions, Berkley Vittoria can obtain an immediate quotation and if required a Decision in Principle. What type of mortgage? The first choice you need to make is between an interest-only mortgage, repayment mortgage, or combination of the two. Interest Only With an interest only mortgage, you are repaying the interest on your loan, not the actual loan amount. If you opt for an interest-only mortgage, it is very important that you set up a suitable investment plan to build up enough money to repay the loan at the end of the mortgage term. If you originally took out an endowment mortgage, there's a chance that your investment may not perform as expected, so you should consider additional investments, such as ISA's, to make sure you don't end up with a shortfall. Repayment A repayment mortgage means that you are paying off some of your mortgage loan amount every month, so at the end of the mortgage term you will not have a balance to repay. Repayment mortgages tend to cost more in monthly payments, but if these are affordable to you then a repayment mortgage could be the answer. Some people combine a repayment mortgage with an interest only element so that the balance to repay at the end of the mortgage term is reduced. Now for the low-down on the types of mortgage product on the market: Standard Variable Rate (SVR) A standard variable rate is linked to, but not the same as the Bank of England's interest or base rate. Lenders tend to alter their SVR's as the Bank of England moves its rate up and down, but they are not obliged to do so or pass on the whole rate change. Fixed A straightforward concept, a fixed rate mortgage means the rate does not change as long as the fixed rate term is in force. The fixed rate term is typically 2, 3 or 5 years but some lenders will fix for longer. At the end of the fixed rate period, the interest rate charged will revert to the lender's SVR. Tracker A tracker mortgage follows the base rate, so if the Bank of England rate rises or falls by 1% then your mortgage interest rate will do exactly the same. Tracker rates tend to be between 0.5% and 1% higher than the Bank of England base rate, and some of these products have a 'collar', which is a minimum level below which your interest rate will not go. Discount A discount mortgage is usually a rate that is discounted from a lender's standard variable rate (SVR). These discounts usually last for an initial period, e.g. 2 years, after which the rate will revert to the lender's SVR. Cash Back A cash back mortgage is precisely that - on completion of the mortgage, your lender will pay a percentage of the amount borrowed back to you as a lump sum. Do bear in mind that the higher the cash back amount, the greater and more complex the number of strings likely to be attached to the mortgage, so make sure you understand all aspects of the product. Capped A capped rate mortgage could be for you if you want to know the most you will ever have to pay each month for your mortgage, but at the same time you benefit by paying less if interest rates fall. The loan has a maximum interest rate over which you will not be charged for a set period, however lenders usually set a higher rate for a capped mortgage over, say 3 years, than they would charge on a fixed rate for the same period. Offset In principle, an offset mortgage works by using savings to cancel out mortgage debt. There are two basic types of offset deal, a current account mortgage (CAM) which links a homeowners current account with their mortgage so they see one statement and one balance, and an offset mortgage where the deposits are kept in separate accounts but linked for the purpose of interest calculation. With both types of offset, borrowers usually make a regular monthly repayment. Buy to Let Buying property to rent out is very popular in the UK and buy-to-let mortgages cater for this specific purpose. The type of mortgage deal on offer varies from fixed rates to trackers, and lenders will normally require a deposit of at least 15%. Rates are usually higher for Buy to Let mortgages. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. |
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