Buying My First Home with Remortgages Services

Simply put, a remortgage is a new mortgage for a property that the mortgage applicant already owns, or the property is currently in the mortgage, and the applicant is seeking an extension. In other words, in the case of remortgage, there are usually two options: either by transferring the product to the current lender, or the applicant can use the product of a new lender.

1. Product transfer – involves exchanging transactions with the current lender without borrowing more money.
2. Change Lender – The new lender pays the funds released through an old lender, and then your mortgage continues with the new provider.

What are the most important reasons to use remortgage services for first time buyers?

There are several reasons you might want to mortgage your property, and the benefits can be huge. Simply put, a mortgage can greatly improve your financial situation. Buying a first home with first time mortgages, buyers can save on interest rates and adjust their mortgage rates to protect against rising prices, make monthly payments more affordable, or free up some home equity. Here we look at some of the main reasons for first time buyers to remortgaging in more detail:

• Remortgage for a better rate

Changing the mortgage to another lender may require you to pay an exit fee to your current provider, or you may have to pay an early mortgage repayment cost. However, these additional costs can be worth transferring to a new mortgage because you can save many of your costs with the new mortgage. Applicants should, therefore, carefully consider the other lenders’ rates. They need to consider whether they will save more money, despite the costs they may have to pay to leave their current lender. Mortgaging, especially with bad credit, leads to higher interest rates.

• Your current mortgage is running out.

Fixed-rate, track-based, or discounted mortgages can cost borrowers a great deal of repayment over time. For example, to prevent a transfer to the SVR, it is recommended that borrowers look for cheaper mortgages about 16 weeks before the end of the current transaction.

• Borrow money on your mortgage

Borrowers may need more mortgages for various reasons, including freeing up their equity at home, making repairs, upgrading home facilities, or paying off other existing debts. In this case, the current lender may have rejected the applicants’ request for a different mortgage. You may be able to do this by changing your mortgage. So your new lender wants to know why you are borrowing more money and may ask you for proof.

• You want more equities.

The more installments you pay on your mortgage, the more equities you will have in your home. Therefore, you may have the opportunity to use remortgage services to have a cheaper transaction with a Loan-To-Value (LTV) ratio lower than your current mortgage.

• Change the type of your current mortgage.

If you change jobs, travel, study, etc., you may want a more flexible mortgage. Some lenders combine your mortgage with your current account or savings account, thus providing more opportunities for applicants. In general, whatever flexibility you are looking for, there will likely be a mortgage that fits your needs. However, you should be aware that you may be willing to pay a little extra to get the flexible option. So make sure you choose only the optional extras that are right for you. Also, keep in mind that you can always reconsider any other options you may need in the future.

• Release equities to buy to let

If the amount left in your mortgage is relatively small, remortgaging to free up equity to buy to let is a good idea if you want to buy a new property. Liberalization of equities can be used to buy to let deposits, which may be more cost-effective as a purchase usually has a high-interest rate on the mortgage. But since this new mortgage purchase is bigger than your current mortgage, you need to prove to your lender that you can repay it. However, the expected income from renting a new property may be considered when calculating your eligibility for a larger mortgage. In addition, there may be periods when your purchase is empty to allow the property, so you need to show your affordability to the lender. The same applies if you want to release a lump sum from your current home to buy an extra home. Your lender wants to know if you can repay your mortgage in instalments each month.

• The value of your home has increased significantly.

Since you got your current mortgage, the value of your property may have increased significantly due to the renovation or expansion. In this case, you can use a higher LTV ratio in your mortgage, and the lender will apply lower interest rates for you.

• Change in circumstances – divorce

If you are divorcing or separating from a partner with whom you have signed a mortgage, remortgage services can be one of your financial separation options. A shared home is usually the biggest asset, and there are several options for you. Selling a home, paying off a mortgage, and sharing any interest are options, and allowing your partner to buy you is another. However, if you want to stay home, you will have to repay the entire mortgage, and you may need to buy your partner’s equity. If this is the method of your choice, you should contact your lender as soon as possible to see if it is possible to transfer the mortgage only in your name. Your lender wants to make sure you can afford to pay the instalments based on your income. If you do not meet their eligibility criteria, you may be able to get a new mortgage with another lender.

How can I succeed in buying my first home? 

First time buyers must consider all the reasons for their remortgage options so that they can save thousands of pounds during their repayment period. By talking to SWG Mortgages specialist advisors, first time buyers can be sure that they are always getting the best deal and improving their financial situation. If you are planning to use remortgage services, contact our advisors today and use the services of SWG Mortgages advisors to access thousands of transactions.