Remortgaging isn’t always as simple as switching lenders – there are lots to consider, from extra costs to finding the right time to remortgage. If you’re considering remortgaging or you simply want to learn more about the process, we’ve got you covered.
Keep reading to learn all about remortgages, including what remortgaging is, how remortgaging works, when you should remortgage, what you need to consider, and how to remortgage.
What Is Remortgaging?
Remortgaging is the act of applying for a new mortgage with a different lender while remaining in your current home. It essentially involves paying off your current mortgage with the funds obtained by a new mortgage while using the same property as collateral.
When Should I Remortgage?
You can remortgage your home whenever you like, but most people will remortgage their home when their current mortgage deal is coming to an end. This means that you won’t have to pay any exit fees or early repayment fees.
You also won’t have to settle for your current lender’s SVR (standard variable rate), which may be higher than many other lenders.
If you come across a significantly lower rate by another lender, then it may be worth remortgaging. However, be sure to factor in exit fees – because many lenders will charge a hefty exit fee if you move to another lender before your mortgage term ends.
You may also consider remortgaging after a valuation. If you’ve had your property valued recently and discovered that it’s increased in value, then you might want to raise capital.
You could benefit from remortgaging early and using the extra capital for home improvements – or even investing in a buy-to-let property.
What Do I Need To Consider?
There can be a lot to consider before remortgaging, from exit fees or early repayment charges to the state of your credit report.
First of all, consider whether it will work out cheaper to remortgage. If you exit before your mortgage term ends, you could rack up thousands of pounds in charges and fees.
Although another deal may seem appealing, it may work out more expensive on top of exit fees and early repayment charges. It’s always best to consult with a mortgage advisor before making any commitment, so you can gain a better understanding of the process and find the best rates.
Another thing you need to consider is your credit report and score. Your new lender will go through credit reference agencies to see your credit history and your overall credit score.
Before remortgaging, it’s worth checking your credit history and taking the time to amend any potential errors that could be present in your credit report. If your credit report is in good condition, then you generally have a higher chance of being accepted for another mortgage.
Have a browse of the mortgage deals available before making a decision. However, before doing this, try to gain an understanding of how much you could borrow – you could try using an online mortgage calculator.
If you have an estimate of how much you can borrow, then you can begin comparing mortgage deals. However, we always recommend choosing a quality mortgage advisor to find you the best rates, as they have connections with various different lenders.
How Do I Remortgage?
Typically, the remortgage process can take a few weeks from start to finish, with the average being between four and eight weeks.
The first step of remortgaging is usually consulting with a mortgage broker who can advise you on the process, what you’ll need to do, and give you access to the best rates from a network of lenders.
You’ll then complete an AiP (Agreement in Principle) – which allows you to find out if the lender is able to lend the amount you need. This doesn’t require a full credit check, and won’t affect your credit score. This doesn’t give you any guarantees but will give you an understanding of your options.
After considering the costs (e.g application fee/ booking fee, solicitor’s fee, valuation fee, or exit fees), you’ll apply for the new mortgage. You’ll be required to provide information about your finances and personal circumstances, with documentation to prove it.
If you’re based in the North West and you’re considering remortgaging your property, we can give you all the mortgage advice and support you need. Consulting with us can ensure that you won’t have to settle for your current lender’s SVR, which could be much higher than other lenders out there.
We can connect you with a wide network of lenders so that you can take advantage of the best mortgage rates in Liverpool and the surrounding areas.
Liam Coker is a highly skilled mortgage and protection specialist who delivers excellent customer service. His knowledge of the mortgage industry is key to finding the correct solution for people’s specific needs.