Remortgaging

Re-Mortgaging. This is what people tend to think of first when they need to do some serious capital raising – and rightly so. The best mortgage rates tend to be the lowest around, so in theory there is no cheaper way to borrow. Banks and building societies are normally keen to lend so the process should be relatively simple as well. The downside, like other secured borrowing, is that you are putting your house at risk if you can’t afford the repayments. How much you can get and how much it will cost are the other key issues. The amount you can borrow depends on the size of your current mortgage, the value of your property and your income.



If your total new borrowings will be worth less than 90 per cent of your property value and your income suggests you can meet the repayments then you shouldn’t have any problem getting the deal signed off. If the new total is more than 90 per cent then you may struggle for approval and several lenders may charge a ‘higher lending fee’ as well. Banks that tend to be HLF free include Bradford & Bingley, Cheltenham & Gloucester, Co-Operative Bank, HSBC and Nationwide. Many smaller regional building societies are also HLF free. Most lenders will charge for valuations and legal work, however, which can total around £600 or more. It is always worth asking your existing lender for a quote when you first think of capital raising on your mortgage, then comparing it with deals from rival lenders. You can normally have the extra money on different terms to your main mortgage – a fix, perhaps, when the rest of your loan is on a discount deal. As ever you should check that the deal you pick is a good one. Look at best-buy charts online or in the papers – www.moneyfacts.co.uk are always good and www.moneysupermarket.com can show best buys from the whole marketplace as well.