Remortgaging Jargon Buster

Remortgaging can be a confusing process, with a lot of information to get your head around.

Here is a short jargon buster that might clarify a few definitions for you:

Remortgaging – Taking out a new mortgage to replace an existing agreement, this usually happens after the current mortgage agreement comes to an end.

Administration fee – This is a charge from the lender for evaluating and preparing your mortgage or remortgage agreement and loan documents.

Mortgage fee – An amount charged by the lender for taking out the mortgage. This may be worth considering if your monthly payments will save you more money over time.

Booking fee - lenders sometimes charge a separate fee to reserve a new mortgage deal.

Early repayment penalty – a fee charged to homeowners when they over pay on their agreed monthly payments. This might also be known as an early exit fee.

Overpayments – This is when you choose to pay more than the agreed monthly payment for your mortgage. Some might choose to overpay their mortgage if they receive a lump sum of money either through inheritance or a bonus at work however, this can sometimes incur penalty charges

Flexible mortgage – a mortgage agreement which allows you to vary your monthly payments on your mortgage. This might also allow you to take payment holidays, and under or over pay without incurring penalty fees.

Fixed rate mortgage – a mortgage agreement with an interest rate that doesn’t change for the remainder of the mortgage deal.

Standard Variable Rate – this is a standard interest rate on your mortgage that is decided by the lender. They also have the option to increase or decrease this amount when they choose.

So now you are a bit more clued up on some of the terminology, it might be time for you to consider your options if you are reaching the end of your current mortgage agreement. But make sure you leave enough time and shop around for the deal!