What is a Remortgage?
Imagine staying in the comfort of your current 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, unlocking access to more favorable terms.
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 Current Mortgage?
Some mortgages come with hidden departure costs, like exit fees or early repayment charges. If your current deal isn’t up yet, these could be significant. Review your mortgage paperwork or reach out to your lender for the full picture.
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 may suit those willing to adapt. Consider what fits your life now and in the years ahead.
Is Your Credit Score Ready?
Lenders will peek at your credit score, so ensure it’s in tip-top shape. Even small errors, like a misspelled address, could cause hiccups. Double-check your credit file 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 a 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 future exit fees in case you decide to remortgage again.
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 credit statements.
Finalizing Your Remortgage:
The last steps are much like buying a new home. Your lender will run a credit check, value your property, and coordinate with a solicitor to complete the transfer. Some lenders even offer this service for free—be sure to ask!
Remortgaging can feel like stepping into a new chapter of your financial journey. With careful planning and the right advice, you can turn it into an opportunity to make your home—and your finances—work even better for you. ✨
