What is a Remortgage?
Imagine staying in the comfort of your home, but transforming your financial arrangements. That’s essentially what a remortgage is! It’s when you secure a new mortgage with a different lender while keeping your current property. Don’t confuse it with borrowing extra from your existing lender – it’s a fresh start with a new provider.
When Should You Remortgage?
If your current mortgage deal is nearing its end, or has already shifted to a follow-on rate, it’s time to explore new opportunities. You might discover some enchanting deals, especially if your property’s value has risen since you bought it. A higher valuation could mean a better Loan to Value ratio, potentially unlocking access to lower interest rates.
Remortgaging isn’t just about savings. It can help you fund home improvements or that dream project you’ve been envisioning. But tread carefully; adding to your loan means additional repayments over the long term. Planning to consolidate debts? Independent financial advice is your guiding star. Remember, your home is at stake if repayments falter.
Life’s twists and turns, whether joyous or unexpected, might mean your current mortgage no longer suits your story. Whether you’re welcoming a new family member or adjusting to changes in income, remortgaging is your chance to align your mortgage with your evolving needs.
Ready to Begin Your Remortgaging Journey?
Remortgaging typically takes 4 – 8 weeks, and most applications will require a chat with a mortgage adviser. Before diving in, reflect on these five questions to clarify your path forward:
What Will It Cost to Exit Your Mortgage?
Some mortgages come with redemption costs and exit fees. If your current deal isn’t due to expire, then it is typically a percentage of the current mortgage balance – plus a possible exit fee. Contact your lender or broker for clarification.
What Do You Want from Your New Mortgage?
Do you dream of lower monthly payments? Or maybe you want flexibility to pay off your loan sooner? Fixed rates offer stability, while variable rates, which are often higher, may suit those willing to adapt. Consider what fits your life now and in the years ahead.
Is Your Credit Profile Up To Scratch?
Lenders will peek at your credit profile, so ensure it’s in tip-top shape. Even small errors, like a misspelled address, could cause hiccups. Check your credit profile before applying.
You could use a mortgage calculator to gauge how much you can borrow and estimate your monthly payments. Don’t forget to factor in potential interest rate changes, they can ripple through your budget.
What Deals Are Available?
Once you know your goals and budget, it’s time to compare deals. The perfect remortgage could be just around the corner.
The Remortgaging Process: Step-by-Step
To successfully remortgage, you’ll need to understand the process and costs involved. Here’s our roadmap to guide you:
Get an Agreement in Principle (AiP):
Many lenders offer an online AiP—a quick way to gauge if you’re eligible for the amount you need. While it’s not a firm approval, it’s a helpful glimpse of your options without a hard credit check.
Account for All Costs.
Check if your new lender charges fees like:
Application Fees: Setting up your new mortgage
Valuation Fees: Confirming your property’s value
Solicitor’s Fees: Managing the legal transfer of your mortgage
Don’t forget to ask about exit fees in case you remortgage again in the future
Submit Your Mortgage Application:
Once you have an AiP, it’s time to officially apply. Be ready to share details about your finances, income, and current mortgage. Gather supporting documents like payslips and bank statements.
Finalising Your Remortgage:
Your lender will run a credit check, value your property, and coordinate with a solicitor to complete the transfer. Some lenders even offer a legal team for free, but set your expectations to be in line with what a free service offers.
Remortgaging can feel like stepping into a new chapter of your financial journey. With careful planning and the right advice, like we offer at Endeavour Magic Mortgages, you can regain control on your finances ✨
