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Remortgaging is not something we do every day so when you do think it might be a move for you, understandably you will have many questions before you make the decision. 

Thankfully we have created a handy guide to remortgaging, to provide you with all the information you need to decide.

What is remortgaging?

Remortgaging is when you use the property you already own to secure a new mortgage. You will typically do this to either:

  • simply swap your current mortgage for a new one
  • borrow money against your current property

Reasons to remortgage

When you took out your current mortgage, no doubt you chose the best deal you could at the time. But as the market changes, you may be able to get a better deal so it might be time for you to remortgage. There are of course many other reasons to remortgage and we list some of these below.

1. To get a better mortgage or rate

As the market changes it could mean that you can get a better deal. It could also mean that your current mortgage may no longer be a good deal if you have come to the end of your fixed or discount rate term. In this instance, you may wish to move onto the standard variable rate (SVR) which will be a lot higher than the rate you were previously on. By remortgaging you get the chance of a better rate.

Also, your financial circumstances can change, forcing you to look for a better mortgage or rate. Remortgaging to get a better mortgage rate may reduce your monthly repayments meaning they become more affordable for you. If you're lucky enough to have an increase in your income you can afford to select higher monthly payments across a shorter payment time frame.

When looking for a better mortgage rate you may find a flexible mortgage is suitable for you. Flexible mortgage features can provide you with some control over when and how much you pay back depending on what you can afford, so you can at times intentionally overpay. You may also be able to take payment breaks too. 

2. To save money

By remortgaging your property, you can save money. In fact, remortgaging can create huge savings when, for example:

  • your current property has seen an increase in its value
  • you have reached the end of your fixed-rate deal
  • you have not reached the end of your current mortgage deal but are in the last six months of it so securing a fixed rate mortgage saves you your current lender's costly default rate
  • your current mortgage rates is a lenders' variable rate
  • you simply find remortgaging means securing a new mortgage at a cheaper deal.

3. To protect finances

Wishing to protect your finances is another good reason to remortgage your property. You may have various reasons for this such as:

4. To borrow more money

Needing to borrow more money for something is another reason why you may decide to remortgage your property. You may be saving up for expenses looming such as home improvements or you want to pay off some debts. Increasing your borrowing can allow you to have cash freed up for this. 

Some lenders may not allow you to borrow extra money or have poor terms regarding this so remortgaging your property may allow you to find a lender with better terms. 

Bear in mind though that if you wish to remortgage you must be able to show that you can afford it. If you have equity in your current property you may be able to borrow.

Reasons to not remortgage

Despite the many reasons why you may wish to remortgage your property, there are of course reasons why you may feel it is best to not remortgage. 

1. High repayment charges

Whilst there is no set time when you can remortgage, there are times when you could incur an early repayment charge if you do. This is when you have not reached the end of your fixed or discount rate term. Therefore, this is not a good time to remortgage. However, you may be able to remortgage through your current lender with a better mortgage deal if they offer a reduced early repayment charge.

Also, whilst it may be a good idea to remortgage now as interest rates may rise, if in fact they don't but actually decrease, with a fixed rate deal and you could be paying a higher rate than you needed as time goes on.

2. Your current mortgage debt is low

If your current mortgage is low you may not want to remortgage. This is because although you may find remortgaging means a lower interest rate because your current mortgage debt is low, you feel the effect of the fees when changing, therefore, many lenders will not take on someone whose mortgage is less than £25,000.

3. You have low equity

If the equity in your current property is low, you are unlikely to find a better rate mortgage than your current one meaning it is not a good time to remortgage. When this is the case, you could wait a while before remortgaging to allow you time to build up the equity in your property.

4. The value of your home has dropped

When the value of your home rises, you can get a lower mortgage rate if you match the lower loan-to-value band. However, if the value of your home has dropped, it is not a good time to remortgage as you will not get a better deal than when you first took out your mortgage, as you may have negative equity in your property. 

5. A change of circumstances

If you have a change of circumstances since you took out your mortgage such as switching from being employed to self-employed, you may find it is not a good time to remortgage. This is because you may no longer meet the criteria for obtaining a mortgage as there is no evidence to prove your income.

If your change of circumstances is that you have had recent credit problems, which did not exist when you took out your current mortgage, you may also find it tricky to remortgage your property.

Also, if you have a change of circumstances pending such as moving house, it is not a good time for remortgaging. If you do, although you may have a few months at a lower-rate mortgage, you will then face a large early repayment charge

What is the remortgaging process?

If you do decide to go ahead with remortgaging you need to know what the process is. There are also things you can do in preparation for remortgaging such as tidying up your credit file and checking any fee to exit your current mortgage. And of course, it is important to start a search on mortgages for your remortgage by comparing the market!

We have divided the remortgaging process over five stages:

1. Understand the details of your current mortgage and get your paperwork in order

To understand the remortgaging process you need to know what you are comparing any new mortgage with to make sure you know your current mortgage details. This can involve looking at:

  • the type of mortgage it is
  • what interest rate you have
  • how much you pay monthly
  • how much you have left on your current mortgage
  • what early repayment charges you would incur by remortgaging
  • the value of your home at the current time.

You must also have  your paperwork ready for any new lender. Having this ready in advance will help speed up the overall remortgaging process for you. Paperwork can include:

  • recent payslips
  • bank statements
  • P60 tax statements 
  • tax returns if you are self-employed

2. Find a fee-free mortgage broker

A fee-free mortgage broker can check if you will save money by remortgaging and can compare mortgage deals on the market for you. You should approach them around six months before when you apply to remortgage. 

3. Get an agreement in principle and contact your current lender 

You can get an online agreement in principle before you formally ask for a mortgage when remortgaging. Whilst, not an offer as such, it helps you to get an idea if you are likely to be offered the mortgage deal or not. When you get an agreement in principle you can take it to your current lender to see if they match it or top it.

4. Apply for your remortgage

If remortgaging is for you and your property, you need to take the leap and complete the application form for your remortgage. Your potential lender will then assess the application and your suitability.

5. Get a competent conveyancing solicitor with expertise in remortgaging

Finally, if you choose a new lender to remortgage your property, you will need a conveyancing solicitor to ensure that the legal process of your remortgage is all correct.

How long does remortgaging take?

Once you have completed your mortgage application form, the process can take around 18 - 40 days. This is, however, only an estimate.

Do I need conveyancing to remortgage?

If you're remortgaging you will not always need a conveyancer to remortgage. You will only need a conveyancer to remortgage if you are using a new lender. 

You will not need one if your mortgage is with your existing lender. This is where you may be, for example:

  • borrow further in your current deal
  • move to a new deal with your lender which is termed a product transfer.

Thinking of remortgaging?

As you are thinking about remortgaging, you may need a conveyancing solicitor which is where we can help you. At Homeward Legal  we have extensive experience in helping property owners like you in the process of remortgaging where we will provide you with a competent solicitor by your side.

So contact Homeward Legal on or send us a message here. Whatever your conveyancing needs, we are always ready to help.

Conveyancing is the exchange of property between you and another party. Although you may immediately think of conveyancing as selling and buying, it does of course also include remortgaging. As you are thinking about remortgaging and may need a residential conveyancing solicitor our competent solicitors can assist you. Our fully competent solicitors are all regulated by the right bodies to give you legal advice and assist with your conveyancing.

As you are not new to the property market, you don't need us to remind you that it can be a tricky market to deal with,  and this does include if you're remortgaging. Deciding to remortgage is a significant decision so you want to ensure the process is managed smoothly. Your mortgage is one of your largest financial commitments and with it, of course, come risk factors so you must get solid advice. At Homeward Legal, we understand you have questions and need some guidance along the way so as always, we are willing and ready to help you through your remortgaging process.

It doesn't matter what conveyancing needs you have, you can contact us today on . Alternatively, drop us a quick line here. Did you know we can also provide a fast quote online? This will give you an idea of the low cost of letting us take care of your conveyancing needs.

Contact us for help with your conveyancing needs

Homeward Legal is here to help you with all your conveyancing needs. Our mission is to make your property moves straightforward, speedy and of course cost-effective. We pride ourselves on providing you with excellent property solicitors who will guide you smoothly through your conveyancing processes.

Let Homeward Legal assist you with any conveyancing needs. Call today. You can send us a message here if you prefer and we can also give you a quote online.

Last updated 08.11.23

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