We are currently going through the remortgaging process (or moving house!) as our current deal is about to end. Remortgaging can sound like an intimidating process, but with the right information, it becomes a lot simpler. Whether you’re looking to snag a better deal or raise funds for home improvement or other big-ticket expenses, remortgaging could be a viable option for you.

Always consult with a mortgage advisor to ensure you get the best option for your new mortgage deal. The will make the whole process easier and make sure you get a good deal. 

What is a Remortgage?

Remortgaging is the process of switching your existing mortgage to a new one while staying in the same property. It could be with your current lender (a process also known as ‘product transfer’) or a different lender.

Why Should You Remortgage?

There are various reasons why people opt for a remortgage. Here are a few:

End of Mortgage Deal

A common reason for remortgaging is the end of your current mortgage deal. When your mortgage’s initial period ends, you’ll likely be moved onto your lender’s standard variable rate (SVR), which could be significantly higher than your initial rate.

When you take out a mortgage, most people opt to lock into a fixed-rate mortgage. These are typically for 2, 3 or 5 years. This means you agree on an interest percentage and pay that for the duration of your deal, regardless of any interest changes. So if interest rates go up, you still pay your agreed mortgage repayments price and not the higher interest rate. But if interests go down, you may lose out. There’s no guarantee of what will happen with interest rests, so by locking in this price, you can ensure your financial security should interest rates soar. However, there are usually exit fees if you end your mortgage early. 

Lower Monthly Payments

If you find a new deal with a lower interest rate, your monthly payments could decrease, potentially saving you a significant amount of money over the mortgage term. Also, having more equity in your property may give you access to lower interest rates. 

Borrowing More

You might choose to remortgage if you want to release equity from your home to fund renovations, an extension, or consolidate other debts.

When is the Right Time to Remortgage?

The right time to remortgage largely depends on your circumstances. If your current mortgage deal is about to end, this could be an ideal time. However, it’s important to factor in any early repayment charges you might need to pay if you leave your current mortgage deal before it ends.

How Does the Remortgage Process Work?

The remortgage process involves several steps, including:

1. Research: Check the latest mortgage deals to determine if you could get a better rate elsewhere.
2. Mortgage Broker Consultation: A mortgage broker can help guide you through the remortgage process and find you the best deal.
3. Application: Once you’ve found a suitable deal, you can apply for your new mortgage. You’ll need to provide information about your financial circumstances and your current mortgage and pass affordability checks. 
4. Credit Check: Your new lender will perform a credit check to assess your credit history.
5. Property Valuation: Your new lender will arrange a valuation of your property to ensure it’s worth the amount you’re borrowing.
6. Mortgage Offer: If your application is successful, your lender will send you a mortgage offer outlining the terms of your new mortgage.
7. Legal Work: A solicitor or conveyancer will handle the legal work involved in transferring your mortgage, including registering the new mortgage with the land registry.
8. Completion: The final step involves your new lender paying off your old mortgage and setting up your new one.

How Long Does it Take to Remortgage?

Typically, the remortgage process takes between 4 to 8 weeks from the date you apply. However, this timeline can vary depending on your individual circumstances and the complexity of your application.

How Much Can You Borrow When Remortgaging?

The amount you can borrow when remortgaging depends on your personal circumstances, the value of your property, and the terms offered by the lender. As a rule of thumb, lenders generally offer up to 4x your annual income, but this can vary.

The Role of a Mortgage Advisor in Remortgaging

A mortgage advisor can be instrumental in guiding you through the remortgage process. They can help you understand the market, explore your remortgage options, and find the best deal for your circumstances. Their expertise and knowledge can save you time and ensure you make the right decisions.

Tips to Speed Up the Remortgage Process

To speed up the remortgage process, it’s crucial to have all your paperwork in order. This includes bank statements, payslips, proof of identity, and any other documentation your lender may require. Being prepared can streamline the process and make it quicker and smoother.

What to Consider Before Remortgaging

Before you decide to remortgage, consider the potential costs. These might include early repayment charges from your current lender, application fees from your new lender, valuation fees, and solicitor’s fees.

Wrapping Up

Remortgaging can be a beneficial financial move, offering the potential for lower monthly repayments or the opportunity to borrow more. However, it’s crucial to understand the process, consider all the costs involved, and seek professional advice if necessary. With the right approach, remortgaging can be a smooth and beneficial process.

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