Remortgaging is the process whereby you replace your existing contractor mortgage with a new one. There are many reasons that people remortgage: to achieve a better interest rate, to raise additional capital for home improvements or debt consolidation, to raise capital for a buy to let deposit, to get a more secure deal (i.e. a fixed rate mortgage), or even to switch to a different repayment basis.

There are so many benefits to be gained from remortgaging your property, and the remortgage market is ever more popular due to the hit that property prices have taken in recent years. Rather than sell a property at a price that is lower than what the property is worth, many have opted to ‘ride out the storm’ and wait for the price of their property to recover.

When you undertake a remortgage to replace your existing contractor mortgage, you are essentially redeeming your existing mortgage and paying off your existing lender with the new mortgage, unless you are remortgaging with the same lender. For this reason, you need to ensure that there are no early repayment penalties on your existing contractor mortgage, otherwise you might end up paying thousands charges for redeeming your mortgage early.

Early repayment charges are usually put in place on contracts with a deal in place on the first few years. For example, if you have a 5 year fixed rate contractor mortgage, your existing lender may have put an early repayment penalty in place that is payable if you redeem the mortgage within the first 5 years.

Remortgages are often sought after when an existing deal ends, as homeowners always want to get the best deal. So if you have a fixed rate or discounted mortgage where the deal is coming to an end and you are about to be put onto the lender’s standard variable rate (which moves with the Bank of England base rate), you may wish to remortgage to a new fixed rate deal so that you know exactly what your monthly repayments will be.

You may have a large expense that you wish to raise capital for, such as a debt that you want to repay, a new car or children’s school fees. A remortgage will often allow you to do this. This sometimes known as a ‘further advance’ because you are advancing additional capital. If you have been in your property for some time you are likely to have equity built up (the amount of value that you actually own), which will allow you to borrow additional funds using your equity as security for the loan.

Another reason that you may wish to consider a remortgage is if you want to expand your property portfolio, and perhaps get a buy to let property. By borrowing additional funds you can use this money to put down a deposit on another property, which you can then rent out and the rental income would then cover the mortgage repayments. You may even have children who are struggling to get onto the property ladder, and a remortgage can assist you in obtaining the required to lay down a deposit on their first home.

Whatever your reason for seeking a remortgage, we can assist you as we specialise in contractor mortgages, remortgages and buy to let mortgages. We offer a telephone based contractor mortgage advisory service and we will deal with the contractor mortgage process from start to finish.

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Please note: the financial advice given on this page is provided by Mortgages Made Easy Limited and is authorised and regulated by the Financial Conduct Authority (FCA reg. 414798). Registered in England No. 4886692 Registered Office: 9 London Road, Southampton SO15 2AE.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please be aware that Buy To Let, Commercial Mortgages and Overseas Mortgages are not regulated by the Financial Conduct Authority.
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