When homeowners approach the end of their mortgage term, they have several options to consider, especially in terms of mortgages. The most common approach is to opt for a remortgage in Bristol, which involves taking out a new mortgage to replace the existing one, often with better terms.
That being said, some homeowners may not be looking to obtain better terms. Some may choose to remortgage in Bristol to release equity or for the specific purpose of making home improvements.
Others may prefer an alternative to remortgaging in Bristol, such as switching to a new product with their existing mortgage lender via product transfers. Debt consolidation remortgages in Bristol are another option that we frequently come across.
By taking out a remortgage in Bristol to consolidate debt, homeowners can merge their unsecured debts (such as credit cards and loans) into a single, more manageable monthly mortgage payment, thereby reducing their overall expenses.
Securing unsecured debt against your home is a complicated process that requires expert guidance. Because of this, we would suggest that you look to take out professional mortgage advice in Bristol before proceeding with a debt consolidation remortgage in Bristol.
When you have multiple debts to pay off, such as credit cards, personal loans, or other unsecured debts, it can be overwhelming to keep track of them and make payments on time. Consolidating these debts can simplify your finances and potentially lower your overall interest costs.
One option for consolidating your debts is through a remortgage in Bristol. Essentially, you would take out a new mortgage with a larger balance than your current mortgage, and use the extra funds to pay off your other debts.
This leaves you with a single monthly mortgage payment to make, which can make budgeting and managing your finances easier.
As mentioned before though, remortgaging in Bristol to consolidate debt requires you to have enough equity in your home. Equity is the value of your home that you own outright, meaning it’s the difference between the current market value of your home and the amount of mortgage debt you still owe.
So, if your home is worth £300,000 and your outstanding mortgage balance is £200,000, your equity is £100,000.
Lenders typically require a certain amount of equity in your home in order to approve a remortgage for debt consolidation. The exact amount varies depending on the lender and other factors, but it’s typically around 20% to 25% of the home’s value.
It’s also worth noting that remortgaging in Bristol to consolidate debt can have some downsides. While it can simplify your finances, it also means you’re taking on more mortgage debt and potentially paying interest on that debt for a longer period of time.
This can lead to higher overall costs in the long run, so it’s important to carefully consider the pros and cons before deciding if this is the right option for you.
Overall, if you’re considering remortgaging in Bristol to consolidate debt, it’s a good idea to speak with a mortgage advisor who can help you understand your options and determine whether it’s the best choice for your financial situation.
Whether it’s actually viable to remortgage in Bristol before the end of your term will depend on how far into your current mortgage deal you are.
In general, people tend to begin the remortgage process around 6 months before their current deal ends, allowing for a seamless transition from one deal to another, however, remortgaging earlier than this can be costly.
If you attempt to remortgage in Bristol too soon, you may be subject to an early repayment charge, which can be expensive. For example, if you’re only 2 years into a 5 year fixed-rate mortgage, you’re likely to incur such a charge.
While it may be worthwhile in some circumstances, keep in mind that you’d be spending a significant amount of money to terminate your existing mortgage deal, which may be more cost-effective for you overall.
Additionally, the funds you use to pay the early repayment charge could have been directed towards your debts instead.
Ultimately, whether or not it makes sense to remortgage early will depend on your individual situation. It’s always recommended to speak with a mortgage advisor in Bristol before making any decisions, as there may be better options available to you, such as a further advance.
If you need to borrow additional funds from your current mortgage lender, a further advance could be a suitable option. This form of borrowing typically involves obtaining extra money at a different interest rate than your primary mortgage.
A further advance is a good alternative to a remortgage in Bristol, particularly for home improvements.
It’s important to understand though, that it may not be the best option for debt consolidation. It’s important to keep in mind that by securing this additional debt against your property, you run the risk of falling behind on payments and potentially facing repossession.
On the other hand, a further advance could be an option to pay off your debts if you’re not yet eligible for a remortgage in Bristol, such as if you’re still in a fixed or introductory period.
To determine the best course of action for your situation, it’s recommended to speak with a mortgage broker in Bristol. They can help you evaluate all of the available options and make an informed decision.
Like any mortgage option, remortgaging in Bristol to consolidate debts comes with both benefits and risks.
The most significant benefit is that you can lower your overall monthly payments by consolidating your debt into one manageable mortgage payment. By doing this, you’ll no longer have to make separate monthly payments to credit providers.
It’s important to keep in mind though, that by increasing your mortgage amount, you’ll be paying back more over a longer period of time. This could reduce your disposable income, but it could also allow you to have more money to put towards your mortgage payments or other expenses.
While the mortgage interest rate will likely be lower than that of a personal loan, consolidating your debt through a remortgage in Bristol can still be more expensive in the long run. This is because you’ll be paying the lower interest rate over a longer period of time.
Moreover, by consolidating your unsecured loans into your mortgage, you are putting your home at risk. If you fall behind on your payments and default on your mortgage, you could face the possibility of losing your home through repossession.
Given these risks, it’s crucial to carefully consider whether consolidating your debts through a remortgage in Bristol is worth it. It’s recommended to speak with a mortgage advisor in Bristol ahead of time, to explore all available options and ensure that you are making an informed decision.
The big question here is whether you should remortgage to consolidate debt or not. The answer to this question is entirely dependent on your personal situation.
Although taking this route is undoubtedly risky and should only be considered in very specific circumstances, it can still prove to be beneficial and help you to improve your financial state.
It’s important to look at taking expert mortgage advice in Bristol before making any brash decisions.
Our mortgage advisors in Bristol are always available to discuss these kinds of mortgage options with you during your free mortgage appointment. They will also recommend alternatives if there are any available to you.
You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
Anyone who is already the owner of a property, whether they are the owner of a family home or a buy to let in Bristol, will see their property as an investment. It’s not just about creating a home, it is the largest asset in your possession, something you might pass through generations or eventually sell for a profit.
The property market is changing all the time and there will be both peaks and troughs. There will no doubt be times during your mortgage term, that you see property prices soaring.
During periods of time such as these, it can be a great idea for you to you to start looking at your options for a remortgage in Bristol, as in some cases you may find that you can access a far better loan to value (LTV) and in turn, better interest rates for your mortgage.
Loan to value (LTV) is a percentage that represents the relationship between the amount of mortgage you take out and the value of the property you are purchasing.
For instance, if you buy a property for £100,000 and put down a deposit of £10,000 (which is 10% of the property value), you would need to obtain a mortgage with an LTV of 90%.
Mortgage loan to values will typically be broken down into tiers or brackets. We find that the lowest bracket will typically be around 60%, with the highest being 95%. The tiers or brackets that are offered will be a little different, depending on the mortgage lender.
The lower your loan to value ratio is, the more competitive rates of interest you will be able to come across in the mortgage deals that are available to you.
Using the above example and moving forward some years, your property value might have increased to £110,000, with the initial mortgage balance of £90,000 coming down to £80,000. This means you have come down to a 73% loan to value.
What this means here, is if you were to take out a remortgage in Bristol, you would probably be looking at a 75% loan to value mortgage, which would likely have far more competitive interest rates.
Of course other factors such as the current condition of the market, also impacts this rate when you remortgage. The reason these mortgages tend to have better interest rates, is due to you being less risk to a mortgage lender.
In order for you to access a better rate of interest or a better term, it’s also important for you to figure out what the value of your property is and if it is more than you actually paid for it. This means having a valuation taken out on your home.
When you take out a remortgage in Bristol, you will be taking out a mortgage with a new mortgage lender, which works differently to a product transfer, where you switch to a new deal but stay with the same mortgage lender.
Again, if you take a look at the risk to mortgage lender, because you are with a new mortgage lender, they will definitely want to double check the value of the property of the value they are going to be lending against. You will typically find one of two valuations taking place.
The first valuation type you may come across, is an Automated Valuation Model (AVM), also called a desktop valuation. With this, there won’t be a physical visit, with it instead using a database that analyses similar properties nearby, in order to determine a general value.
The other type of valuation that you will see, is a physical valuation. This is where a chartered surveyor will actually come out and visit your home, to inspect the inside and outside, in order to give a much more accurate property value.
A physical valuation can be especially useful for homeowners who have had any home improvements or extensions done, that similar properties nearby won’t have, which could be missed by an AVM. This is something you can ask your mortgage advisor in Bristol about, during your free appointment.
Whilst the equity in your home can be often used as a way for you to access a better mortgage deal, in some cases we see that many instead will look to remortgage to release equity. There are a lot of reasons for this, such as those who may remortgage in Bristol for home improvements.
When it comes to taking out a remortgage to release equity, you must make sure that you plan carefully. In almost every situation, you will have a new mortgage that replaces the old one (as remortgages work that way), with you actually moving on to a higher loan to value.
Because you will have a much higher loan to value, it is very likely that you will see yourself with higher monthly mortgage payments to cover.
Many homeowners hope that by investing in these home improvements, you will see the value of your property increasing. This means that when it comes to taking out your next remortgage, you will theoretically see it on a lower loan to value again.
It’s all about making sure that you keep your eyes on the markets and that you have a very carefully thought out plan of action, especially when you have such a large financial investment in your home. A mortgage advisor in Bristol can be advise on how to approach this process.
Depending on your circumstance, you may find that you want to remortgage in Bristol early. Whilst a remortgage in Bristol typically takes place a few months prior to your fixed-period ending, this is not considered “early”. Some may instead look to remortgage even a whole year before that point.
The downside to taking out a remortgage early, is that in almost all cases, you’ll find that you will be responsible for taking out an early repayment charge (ERC), as on a technicality, you will have broken your contractually agreed terms.
House prices can be difficult to predict and navigating the market can be a challenge in itself, when you never quite know what it is going to look like. Whilst it could look like a great idea, it may not be a great idea for you financially to go forward with an early remortgage in Bristol.
People will only usually leave their mortgage early if they have an appropriate reason to do so, though we would always absolutely suggest that you speak with a mortgage broker in Bristol on board if this is definitely a route you want to go down.
An example could actually be the COVID-19 pandemic, where the Bank of England base rate fell down to record lows. Because of these events, people who were about due to remortgage in Bristol once their fixed-rate period ended, were able to inherit those rates and benefit from it.
If you still had to wait a year for this, you potentially wouldn’t reap these benefits, unless you had remortgaged early and fixed-in for longer. This is a pretty niche example from an anomaly in time, especially when there were mortgage lenders pulling products, limiting options for customers.
Even with that in mind though, it demonstrates a circumstance in which an early remortgage in Bristol could be a financial benefit. If your home has gone up in value, you may also see the benefit in an early remortgage, as the costs saved long-term from a lower LTV, may outweigh other costs.
As discussed though, one of those costs will likely be an early repayment charge (although a product transfer with the same mortgage lender could see this waived), as well as you having to pay possible arrangement, valuation and solicitors fees on the new mortgage you move on to.
If you are able to prove that the money you can save will definitely outweigh this, it may be an option worth looking at if you have to, though you should always discuss with a trusted mortgage broker in Bristol to understand the pros and cons first, before making a decision.
This is an age-old question that we find ourselves asked about all the time from both existing homeowners and budding home buyers alike. The answer is always entirely dependent on how the market is performing at any one time.
In order to keep yourself up-to-date with how the market is currently performing, including any changes to interest rates, government schemes and more, take a look at our “Mortgage Market Update” playlist on YouTube. We regularly post mortgage market updates as and when news comes out.
Mortgage rates are basically just the standard rate of interest that a mortgage lender will look to charge you against your mortgages balance.
This interest rate will be a contributing factor to your overall monthly mortgage costs. If you have lower interest rates, it’s likely that your monthly mortgage payments will be much lower also.
There are numerous factors that will go towards determining your mortgage rates, some you can control, some you cannot.
One of these factors that you definitely will be able to have control over, are the personal aspects of qualifying for a mortgage. Things like what your credit score is or how much deposit you have saved and can put towards the purchase of a property.
Typically speaking, the lower the risk, the better the rates.
As an open & honest mortgage broker in Bristol, we have the ability to run through your case, looking to find the most suitable mortgage deal for your home ownership plans. Our trusted mortgage advisors in Bristol ae able to search across 1000s of deals, including specialist one, for you.
What it all boils down to though, is how the market is performing at that particular time, as well as the state of the economy and position of the Bank of England base rate. A well-performing economy will usually see a higher demand for both goods and services, including properties as well.
In turn, higher demand usually means that the Bank of England base rate will rise, which will also see mortgage rates following suit. This is because mortgage rates that are set by your mortgage lender, will be at a percentage sitting above the Bank of England base rate.
Whilst having a better performing economy would mean people can theoretically afford more, mortgage lenders don’t have unlimited funds.
What this means, is that when the Bank of England base rate goes up, the cost of borrowing for a mortgage lender will also go up, which in turn sees mortgage rates also increase to a point where a mortgage lender can cover the cost of their own borrowing.
When the economy isn’t performing too well, this all work completely the opposite.
People will typically be unable to afford as much, which means interest rates will have to come down as a way to try and entice potential customers onto the property ladder, with the promise of possibly lower monthly mortgage payments.
As we have discussed above, one of the primary factors that can impact your mortgage rates, is the Bank of England base rate. As a general rule, a mortgage lender will set their own rates at a percentage above the base rate. This means fluctuations can take place, as the base rate rises and falls periodically.
Another factor that can impact the Bank of England base rate and see it fluctuate, is inflation. The UK government have a specific target that they like to reach, in order to make sure the cost of living is affordable for everyone. Unfortunately, these targets are not always met.
In situations such as these, we may see the cost of living going up. Unlike the typical cause and effect of seeing a stronger economy meaning people can afford more, when this happens, many are left in financial positions that are less than favourable, struggling to get onto the property ladder.
This is also unfortunate news for homeowners who have fixed-rates that are coming to an end. Someone may have, for example, fixed in at an incredibly low percentage, only to come out of their fixed-rate and be set to inherit double what it was before.
Having the help of a mortgage broker in Bristol here, can be truly beneficial.
The Bank of England base rate, generally speaking, will always fluctuate, though it’s not often by much. Tracker mortgages are a type of mortgage that will mirror the Bank of England base rate, sitting at a percentage above it and fluctuating alongside it.
This can be a great mortgage type when interest rates are sitting rather low, though when the rates go up, you could see your mortgage payments changing suddenly, making this a mortgage type without guaranteed consistency.
Whilst tracker mortgages can still be great for some people (your mortgage advisor in Bristol will help you to determine which mortgage deal is best for you), some may argue that a better option could be a fixed-rate mortgage.
These are always the more popular options and allow for customers to lock-in to whatever the interest rate is at that time, for a chosen duration. For example, if you lock-in at a 4% interest rate for 5 years, even if within the next year it jumps up to 6%, you’re still only going to be paying 4%.
On the other hand, if you locked-in for 6% and then it dropped to 4%, you’d be paying more than other homeowners and home buyers would. This is why for many, we see them fixing in for 2-5 years, in order to gauge how rates are changing and to make sure they are always on the best mortgage deal.
When you’re in periods of economic uncertainty, fixed-rate mortgages can provide consistency and ease stress for homeowners. You will have the freedom to choose your own fixed-period duration, which as we said is usually 2-5 years, though we do see customers choosing 7 or even 10 year fixed-rates.
The possibility of coming out a fixed-period into higher interest rates, can actually lead many to remortgage in Bristol earlier than they otherwise would, paying an early repayment charge, to fix-in for a rate that, whilst higher than they had, is much less than it is projected to be by the time their deal ends.
The answer to this is entirely dependent on the way that interest rates possibly change, as well as how your personal circumstances also are set to change. As we have discussed above, there are also personal factors that can have an impact on how mortgage rates possibly change.
Home buyers who have higher deposits may be able to open themselves up to a lower loan-to-value, which in turn can allow them to access much lower rates of interest.
If you find that you are currently in that situation, having taken out a mortgage with lower interest rates, you may wish to take out a fixed-rate mortgage for 5, maybe 10 years, in order to truly reap the benefits of your lower interest rates.
Of course this very much depends on circumstance and 10 years is a long time to wait.
In 10 years, you could see lots of things change; Interest rates could drop significantly lower than you were able to fix-in for, meaning you are paying much more than you would have if you’d only fixed-in for 2 years, remortgaging onto the lower rates much sooner.
A trusted and experienced mortgage broker in Bristol will work to ensure you are well prepared for your mortgage process and help you to make an informed decision. Using our knowledge, we will do everything we can to help you succeed.
Interest rates can change when you least expect them to, depending on how the economy is performing, as well as the state of the market and the Bank of England base rate. Pairing this up with your own personal factors, you might be a little uncertain about what to do next.
By getting in touch with us for expert remortgage advice in Bristol if you’re nearing the end of your initial mortgage deal, or first time buyer mortgage advice in Bristol if this is your first time buying a property, you will have the help of a qualified mortgage advisor in Bristol, who will find you the best deal.
We always want the best for all of our customers, working alongside you to make sure you are well protected from potential future interest rate rises, if we can do so. If the cost of living is concerning to you, a fixed-rate mortgage might be your best option.
Book yourself in for a free mortgage appointment or remortgage review today, and we will see how we can help, recommending the most suitable mortgage option for you.