13 Dec 2018
A Step-By-Step Guide of How to Remortgage Your Property
Getting a mortgage is a long-term commitment, but a lot of homeowners don’t realise that they are not stuck with the same product for the entire term of their mortgage. Remortgaging is the process of moving what you owe with your current mortgage lender across to a new lender. The process of switching mortgage products, but remaining with your existing lender is known as a Product Transfer. We hope that this short guide will help you understand the process of remortgaging your property.
- Thinking About the Reasons for Wanting to Remortgage
Most homeowners decide to remortgage their property to cut the cost of their monthly repayments. However, there are other reasons to consider –
- Switching from a Standard Variable Rate to capped or fixed rate mortgage to get certainty on the monthly repayments (which could also save you money).
- To borrow more money by releasing equity in your property
- To switch to a more flexible mortgage
- To consolidate debts
- A Mortgage Broker Will Help Determine If Remortgaging Will Save You Money
As an expert in their field, a mortgage broker will be able to assess your situation and will be able to source the best mortgage deals on the market whilst taking into consideration your eligibility for each lender. Whilst looking at the different mortgages available, a mortgage broker would look at any fees applicable when taking out the mortgage and the true cost over the ‘introductory period’ offered to be able to establish whether you would save money by re-mortgaging when taking into consideration any associated costs, or if you would be better off staying with your current lender and just swapping the deal you are on (a Product Transfer).
At Mortgages Online, our experts have industry leading experience of not only the mortgage market but are also focused on the customer journey to ensure that our mortgaging process is as worry-free as possible. We don’t just look at the rates; we look at the entire mortgage package to ensure that we provide clients with advice suited specifically to their requirements and situation and recommend the mortgage most suited to them.
If you would prefer to manage the process yourself, then you need to make sure that you take all of the charges into consideration including valuation fees, arrangement fees and exit penalties.
To determine whether you will save money or not, you need to add up the monthly repayments on your prospective new mortgage over the term of the new deal and then compare them to what your current mortgage will cost you over the same period.
- Consider What Suits Your Circumstances
An important thing to take into consideration is that the cheapest deals are not always the best deals. You need to think about your circumstances. For example, if you think interest rates are going to drop significantly over the next few years, then a variable rate would be a more suitable product to choose. If, however, you feel there is uncertainty with regards to interest rates and the market and want the stability of knowing what your monthly mortgage payments will be, then a fixed rate mortgage may be more suitable for you. When looking at fixed rate mortgages, you need to also consider the introductory period offered, as your payments will only be ‘fixed’ for this period of time. After this, you will move onto a Standard Variable Rate.
- Making the Remortgage Application
Once you have found the product that you want, you will need to complete an application form. If you choose to make an application using MO, we will submit the application on your behalf.
Once submitted, your case will then be passed onto our team of administrators who will oversee the process. They will chase and progress your application at least once a week to ensure your application is processed by the lender as quickly as possible, together with ensuring that you are kept thoroughly updated throughout the process. This is the customer journey that we are proud to provide, unlike other online mortgage brokers.
If you wish to apply yourself, then there are a few things to take into consideration. Your application will be subject to a credit score/credit rating check that is performed by the prospective lender. The lender may also want to visit your property to establish its value and to confirm it is suitable security for them, although ‘Desktop valuations’ where the lender doesn’t need to visit or access the property are on the rise. The type of valuation required varies and is normally dependent on key points such as the property type, the loan to value and the lender’s preferred type of valuation.
Our service is ideal for people looking to remortgage or purchase, which includes First Time Buyers!
- Find a Solicitor to Handle the Transaction
People who are re-mortgaging their property will need to have a solicitor or conveyancer in place to handle the move from their lender to another. How the solicitor is instructed is dependent on the selected mortgage deal. If you chose a product that comes with ‘free legals’, the mortgage provider will instruct a solicitor from their panel who will carry out the legal side of the transaction. If, however, your product doesn’t come with this, you will need to choose and instruct your own solicitor and pay for their services. The solicitor will handle the move from your current mortgage provider to the other as well as registering the new mortgage with the Land Registry.
There are many types of mortgage so trying to find the perfect one for you can be a long and daunting task, but it doesn’t have to be. Our mortgage finder tool will allow you to search over 12,000 mortgages from more than 130 lenders in a matter of minutes. Get in touch with us today to see why online mortgage brokers like MO are the future of finding the best mortgage deals.