Welcome to the ultimate guide on remortgaging! Whether you’re a savvy homeowner looking to cut costs or someone seeking a better fit for your changing lifestyle, understanding the remortgaging process is key. Let’s break down everything you need to know about remortgaging your home as it could be your smartest financial move yet!
What is a Remortgage?
Let’s start with the basics. A remortgage isn’t about borrowing more from your current lender. Instead, it’s all about switching to a new mortgage deal with a different lender while staying in your beloved home. Think of it as upgrading your mortgage to better suit your needs or to take advantage of better deals out there.
Is It Time to Remortgage?
So, when should you think about remortgaging? Here’s the deal: if your current mortgage is about to end or you’ve been moved to a follow-on rate, it’s definitely time to shop around. The best time to start searching is about six months before your current deal expires. Or maybe your property’s value has gone up—congratulations! This could unlock better loan-to-value (LTV) ratios and more attractive deals.
But it’s not just about saving money. Big life changes—like starting a family or a shift in income—can make your current mortgage less suitable. Remortgaging can be a golden opportunity to tailor your mortgage to your new reality.
Get Ready to Remortgage: 5 Essential Questions to Ask Yourself
Before you jump into the remortgaging process, it’s important to get everything in order. Here are five crucial questions that will help you prepare:
- What Will It Cost to Leave Your Current Mortgage? Leaving isn’t always free. Some mortgages come with exit fees or early repayment charges. This could be a significant sum, so dig out those documents or call your lender to get the facts.
- What Do You Want from a New Mortgage? Are you looking to lower monthly payments, or maybe you want the flexibility to pay off your mortgage early? Decide what’s important to you now and what might be crucial in the future.
- Is Your Credit Score in Good Shape? Your new lender will scrutinise your credit score. Double-check that all your details are correct to avoid any hiccups. Even a minor error in your address could derail your plans.
- How Much Can You Borrow? Use a mortgage calculator to see what you could borrow and what your payments might be. Don’t forget to consider how a change in interest rates could impact your budget.
- Which Remortgage Deals Are Available? Once you know what you want and how much you can borrow, start comparing mortgage deals. A little research can save you a lot in the long run.
How the Remortgage Process Works: A Step-by-Step Guide
Now that you’re prepared, let’s walk through the remortgaging process. Here’s what to expect:
- Complete an Agreement in Principle (AiP) Most lenders offer an online AiP, giving you an idea of whether you can borrow the amount you need without a full credit check. While it’s not a guarantee, it’s a useful step in understanding your options.
- Consider All the Costs Remortgaging isn’t just about interest rates. Be sure to factor in fees like application, valuation, and solicitor’s fees. And don’t forget to ask if there are exit fees if you want to remortgage again in the future.
- Apply for Your New Mortgage With your AiP in hand, it’s time to apply. You’ll need to provide detailed information about your personal and financial situation, along with documentation to back it up.
- Completing Your Remortgage The final steps are much like buying a new home. Your new lender will do a credit check and arrange a property valuation. A solicitor will handle the transfer of your mortgage, and some lenders may even offer this service for free.
Key Considerations Before You Remortgage
Before diving into the remortgage process, make sure you’ve considered the following:
- Exit or Repayment Fees: Check if your current mortgage has any Early Repayment Charges (ERC). These fees can sometimes outweigh the benefits of switching to a new mortgage.
- Your Next Mortgage Needs: Not all mortgages are created equal. The lowest interest rate isn’t always the best deal if it comes with strings attached. Think about flexibility and how easily you can exit the new mortgage if needed.
- Credit Score Check: Make sure your credit score is accurate and up to date. This could be the difference between getting approved or not.
Final Thoughts: Is Remortgaging Right for You?
Remortgaging can be a powerful financial move, whether you’re looking to save money, adapt to life changes, or consolidate debts. But it’s essential to do your homework and consider all aspects of the process. Remember, independent financial advice is always available to help you navigate the options and ensure your home stays secure.
Make sure your mortgage is the best fit for your life.
When you’re ready to remortgage:
When remortgaging, you’ll want to instruct a solicitor to handle the legal aspects of transferring your mortgage. Simply Move Home can provide you with fast-moving local solicitors to you and we will always deliver a step-by-step friendly personal service. From the outset, the quote you receive is the quote you will pay, and your acting solicitor will be given all the information up front to complete your transaction promptly which is a service no other conveyancing site offers.
When you are ready, you can contact us at info@simplymovehome.com, call us on 0800 002 9498 or go straight to the Quote System where you will receive four accurate, no obligation quotations instantly.
