Remortgaging works by you refinancing your home from one lender to another where the other lender offers you a better rate than your current mortgage lender. They will assess your ability to be able to afford the mortgage such as checking your income, credit searches and a valuation on the property to ensure you can afford the mortgage for the entire term.
Are you looking for a way to remortgage your home? This guide will walk you through the entire process, including how much remortgaging your property could cost and what you should think about before proceeding.
What is a remortgage?
When you apply for a new mortgage with a different lender while staying in your current house, this is known as a remortgage. It is not the same as other people’s idea of remortgaging, which is borrowing more money or switching rate with their current lender.
Is it time to remortgage?
If your existing mortgage deal is about to expire or has already switched to a Standard variable rate, it’s worth checking out the new deals. Your loan-to-value ratio could have improved if your property is worth more than when you purchased it, for example, which may mean you have access to a wider variety of offers and cheaper rates.
Remortgaging will also help you save money for home improvements or a special purchase. Just make sure you can handle the extra payment over the life of the loan. If you can’t afford the payments, your home may be at risk.
Large changes in your life, whether planned or unplanned, can mean that your current mortgage is no longer adequate. Remortgaging allows you to find a deal with us that is a great match for you now and in the future, whether you’re starting a family or anticipating a big improvement in your income.
Check the market for mortgage deals
To find out how much you can borrow, use our Mortgage Calculator.
Mortgage Saving Experts have experienced advisers who can search the whole of the market for you, so you know you are getting the cheapest deal. We do all the research and hard work for you, so you don’t have to. After all it’s what we do.
Get mortgage advice
Getting advice from a competent professional provides you with further insurance because you know you are getting the right mortgage for you based on your current and future circumstances and goals. This could end up saving you tens of thousands of pounds in comparison to you searching the market yourself and getting to apply for the wrong mortgage.
Getting ready to remortgage
If you wish to look to remortgage:
First, get a decent mortgage adviser like us.
Second, get all the relevant information together such as proof of ID and proof of address, the last 3 months payslips, latest P60 and the last 3 months bank statements as a minimum.
Our adviser will have a chat with you to see what you are looking to do and discuss your options. We will then search the market for you, make a recommendation to you then we can apply for the mortgage for you and process it through to completion guiding you through the process and giving you regular updates and advice if needed.
Once your mortgage has formerly been agreed we will then discuss advise you on your protection needs such as life insurance, critical illness cover and so on.
What will it cost to leave your current mortgage?
Some mortgages impose fees if you leave under certain conditions, such as an exit fee or an early repayment charge. If your current mortgage rate hasn’t finished, you could end up paying thousands of pounds, so check the paperwork you got from your current lender or contact them for more details.
What do you want from a new mortgage?
Do you want to reduce your monthly payments or be able to pay off your mortgage faster? Is a fixed rate the best option for you, as it guarantees that your payments will not adjust for a set period of time? Consider what you need right now and how your requirements will change in the future.
Is your credit score in good shape?
When you apply for a new mortgage, the new lender will run your credit report through credit bureaus. Ensure the information on your credit score is right before applying, as even a spelling error in your address history may trigger a problem.
How much can you borrow?
To find out how much you should borrow is complex, so if you would like a rough figure, please contact us to discuss this and we can give you an indication. These days there is no one simple formula to working this out as there are so many lenders and factors which could affect this. If you wish to find out what your monthly payments will be, use our mortgage calculator. Consider how a rise in interest rates could impact your finances – our calculator will help you figure out how rate increases could affect your payments.
Which remortgage deals are available?
You can begin comparing mortgage offers once you know:
- How much you want to borrow.
- What kind of rate you want (i.e., 2 years fixed).
- How long you want to take the mortgage over (i.e., 25 years).
How the remortgage process works
When deciding how to remortgage your house, it’s important to remember your overall financial condition. It’s also important to know what happens when you remortgage, so here are the steps you’ll need to take.
Complete an Agreement in Principle
Most lenders now allow you to obtain an Agreement in Principle through the internet (AIP). It’s a way to see if a lender can lend you the money you need and whether they will consider your mortgage application. Some lenders do not do a full credit check (soft footprint) and some lenders do a full credit check (hard footprint). A hard footprint on your credit report will reduce your credit score so be careful because if you do lots of AIPs you could badly affect your credit rating. My advice to you is to speak with one of our advisers as we can narrow the chance of you being declined or refused the mortgage at AIP stage because we will know which lenders may be available to you.
Consider all the costs
Check if the lender to which you want to transfer your mortgage to charges any of the following fees to ensure that remortgaging would benefit you:
- Application fee – a charge to set up your new mortgage. Also known as an arrangement, product or booking fee.
- Valuation fee – to confirm the value of your property.
- Solicitor’s fee – a solicitor will need to manage the transfer of your mortgage.
If you plan to remortgage in the future, ask any potential lenders if you’ll have to pay an exit fee or an early repayment charge.
Apply for your new mortgage
You should apply for a remortgage if you have an AIP. You’ll have to include specifics about your personal and financial situation, as well as your new mortgage. Make sure you have proof of income as well as documentation for any loans or other credit commitments.
Completing your remortgage
The final steps of a remortgage are somewhat similar to those of purchasing a new home. Your new lender will run a credit check to validate your current financial situation and arrange for a valuation of your home. The transfer of your mortgage would include the services of a solicitor or conveyancer. Some lenders can include this as a free service.
Remortgaging with us
Get a Mortgage quote [ADD LINK]
You can use the “get a mortgage quote” button on our home page which will allow you to get an idea if you can potentially borrow the amount you need and what your rates, monthly payments and fees may be, but in order to get a more definitive quote its always best to speak with s human being because the rats you see may not necessarily be available to you as a computer will only tell you so much.
Agreement in Principle
Take the first step toward obtaining a mortgage:
Start an Agreement in Principle (AIP) online to see whether you could borrow the money you need.
Our advisors, who have extensive knowledge of the mortgage industry, take the time to get to know you, your financial condition, and your life goals.
From a residential remortgage to a buy-to-let mortgage, from a first-time buyer mortgage to a retirement or equity release mortgage, we have over 50 years of collective experience working with all forms of mortgages.