Day One Remortgages: The Benefits
You’ve just acquired a new property but need to remortgage quickly, but you know many lenders require you to wait for anything from six to 12 months of ownership. Well it doesn’t always have to be that way…this is where day one remortgages come in.
Just like the name suggests, day one refinance offers a loan facility that allows you to remortgage a property immediately after the property purchase, and avoid the delay.
Regardless of how the property was purchased, or even if it is unencumbered, many lenders will adhere to the six month rule of ownership restrictions that were brought in by the Council of Mortgage Lenders (CML) back in 2008 in response to the financial crisis.
That being said, over the last few years a handful of lenders, both high street and specialist, will now consider a day one remortgage application in the right circumstances and there are many different scenarios when waiting six months, just won’t cut it. For example:
Cash Out Refinance
If you have currently used all of your own cash reserves to buy a buy to let, maybe this was at auction, and you now need some of the finance back to start renovations to your property, to cover unexpected expenses or even to purchase a new property.
Alternatively, if in order to secure the property you borrowed funds from a family member or friend, you may want to repay them sooner rather than later and a day one remortgage could allow you to repay that outstanding debt.
Equity Release
If you have recently inherited or been gifted a property that you would like to now release some capital from, day one refinance can help you do just that.
What You Need to Know
Day one remortgages can clearly help you avoid the six month wait, but there are other benefits to considering this type of finance, such as:
Streamlined Process
Securing day one refinance works much in the same way as a traditional mortgage, although if the Land Registry hasn’t updated the name on your title deeds yet, this is currently taking up to six weeks, then you may need to seek other proofs of ownership via your solicitor for verification.
With lender criteria changing on a daily basis, by contacting one of our brokers we can walk you through all the documentation that you might need and advise on the easiest ways to collate this, thus streamlining the process for you.
Lender Know-How
As day one remortgages are only available through a limited number of mortgage lenders and are considered a niche product, we strongly recommend that you use an experienced broker, like us, to capitlise on in-depth criteria knowledge to save time searching for a suitable deal and avoid financial dead-ends. Working with a huge range of lenders on the market including Kent Reliance, Paragon and Fleet Mortgages, from a quick initial chat we will be able to identify the lenders that will accept your application and can even give you access to exclusive deals not available directly.
We will also take the time to understand any terms and conditions of your current mortgage to ensure that you are not hit with any unexpected fees or early repayment charges. In short, we will ensure a day one remortgage really is the right option for your budget and your overall portfolio strategy.
In conclusion, Day One Refinance can be a great option for quickly taking cash out of your property to reinvest or even just allowing you to remortgage at a lower rate to save money on your monthly payments.
But, with limited options available on the market and complex criteria to navigate, this is where the expertise of a seasoned mortgage broker, who has dealt with this type of finance countless times, really comes in. If you would like to discuss your eligibility for a day one remortgage and discover which deals are available for you, we’re here and ready to help.
