Alternatively, if you are looking for additional funds, but are already on an attractive rate with your lender, there are other options rather than a full remortgage. Depending on the amount already lent as a mortgage, compared to the value of the property, most lenders will allow a ‘secured loan’ to be added as additional borrowing, right up to 95% of the property value. A secured loan is a 2nd, or subsequent charge which allows the equity in a property to be used as security. There are also no ‘up-front’ fees to find although costs are added to the advance. The secured loan is usually repaid over a shorter term than a mortgage, circa 3-7 years, but the term can be longer, although this will increase the amount of interest repaid. Second charge lenders are also in the midst of a price war. Many have reduced rates, one or two new lenders have entered the market and another has increased their maximum loan size up to £2m! Rates vary depending on the customer’s circumstances and current level of borrowings. Make sure you review all options available to you and always seek advice.
The remortgage market is awash with lenders actively looking to attract new customers. Whether you want to fix your monthly payments for a period of time, or you fancy a low rate tracker mortgage, or maybe both – a tracker rate with the option to fix later on, there are plenty of great products currently available. Many lenders are offering superb remortgage opportunities with minimal costs to change, including free standard valuations (lender survey on your property) and legal costs (solicitors or conveyancer to register the charge in the new lenders name). Rates are competitively low and mortgage product choice is at its highest for some time. So pull out that paperwork and have a no obligation conversation with your local, independent and whole of market mortgage advisers!
In either of the above the lenders are looking more carefully at affordability, not just for now but also any potential changes that may affect your income in the next five to ten years. Be ready for some fairly details questions when submitting an application!