The savvy switcher's guide
You don't have to be a rocket scientist to realise that, once the promotional period of a mortgage has ended, you could find yourself paying more than you'd like for your borrowing. On the other hand, you may be looking to move house; your circumstances could have changed; or you just want some extra cash. Whatever the reason, remortgaging can make a lot of financial sense.
We have a range of attractive remortgages that could give you just what you're looking for.
If you want to capitalise on a rise in your property's market value (since you arranged your current borrowing) you may even be able to borrow more as your Loan To Value (LTV - the % of the loan amount compared to the price of your property) will have reduced.
As for reducing your repayments; the astute mortgagee will often look around to see if they can benefit from new rates on offer. After all, stay on the same deal for the full term of your mortgage and you could lose out on the substantial savings you could make by regularly moving your mortgage.
Remember, remortgaging will change your repayments, the interest you pay or length of loan - or a combination of all three, which could have a significant effect on the overall amount (up or down) you pay.
Before you even think of switching
Make sure you know exactly what your situation is with your current mortgage.
- When is your promotional rate going to end? (or when did it end if it already has?)
- Does your current deal have an extended tie-in period?
- Are you liable to any Early Repayment Charges (ERCs)?
- If you are liable for ERCs, how much will they be?
Only by finding out the above can you calculate the cost (if there is one) of leaving your current deal, (your current lender should be able to provide you with a redemption statement that gives the final amount needed to settle the loan by a particular date, including any extra fees payable.) If no cost is involved, then the longer you put off switching, the more of your money you could be losing on a deal that is no longer the best for you.
If there is a cost to leaving your current mortgage, this shouldn't necessarily put you off switching. Your short term loss could be more than recouped by a longer term gain. So make sure to calculate how much your new repayments would be. It might be that the potential savings you'd make with your new mortgage (over it's special rate period) are larger than the penalties quoted for leaving your old one.
Choosing which new mortgage to switch to
Whatever your circumstances it's important to fully research the type of mortgage you want to take out. You may have a Standard Residential mortgage that you'd like to change to a Buy to Let. Or perhaps your situation has changed, and you require a flexible discount mortgage instead of a fixed rate.
At Giraffe we have a range of great rates across all our mortgages types. To view them, simply use the navigation bar to the left. Once you've found the mortgage you want, all you have to do is work out how much you can remortgage your property for. But don't worry, we can help with that.
Calculating the size of your remortgage
Our borrowing calculator can help you work this out. The figure you can normally borrow is calculated by taking the first two mortgage applicants' incomes (or just yours if you're remortgaging alone) deducting any regular outgoings and multiplying the answer by a set figure.
Why knowing how much you can borrow is crucial
Without knowing this figure, you can't properly budget for all the things you need to bear in mind when remortgaging - e.g. Early Repayment Charges, legal fees or administration costs. Using this figure, you can also work out your Loan To Value (LTV) ratio. Remember, since you last arranged a mortgage both your income and the value of your property may have changed. So your LTV level may have changed too, meaning you can borrow less or more. As some of our mortgages have different LTV bands, when choosing a remortgage, you need to know this percentage as it may well mean you can get a better deal.
Important things to remember
If you've received a redemption statement from your current lender, we will need to see it. We may also need to arrange a new valuation of your property and there may be some legal and arrangement fees to pay, depending on the type of mortgage you have chosen. Please note that to remortgage with Giraffe, the registered owner or proprietor must have owned the property for at least 12 months.
Applying made easy
If you've done your homework and are sure you've found the right remortgage for you, it's time to grab a Giraffe before it's gone.
Good news. As Giraffe is a direct mortgage provider you can get everything you need to complete your application here online - from a Key Facts Illustration quote to a full application. Simply log into our secure application system.
Or you can speak to one of our mortgage specialists who will be able to talk you through the next steps. Just call 0845 603 9273*.