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Thinking of remortgaging? Here is all you need to know

remortgaging

Getting on to the property ladder can be tough, but once on it, your property could prove to be a worthwhile investment. And while it may be tempting to sit back and enjoy your home, it is important to keep an eye on your mortgage to ensure you are getting the best possible deal.

Many of us choose to opt for fixed rate mortgages as they allow for easy budgeting. With fixed rates often lasting two to three years, this gives homeowners an opportunity every couple of years to review their mortgage deal, and, if necessary, to remortgage on to a better deal.

Is remortgaging a good idea?

This depends on your financial situation. If you are finding your monthly repayments tough to make each month, remortgaging could help you stretch the term out over more years, thus reducing your monthly payment. Bear in mind though, this does mean you will be paying interest for longer too.

Remortgaging also allows homeowners to release equity from their property, great for those looking to add further value to their home through an extension or other home improvement projects.

If your current mortgage deal is about to come to an end, before you go on to your lender’s standard variable rate, which is unlikely to be the best possible deal for you, shop around for the best deals. If it benefits you financially, then consider remortgaging.

Can I remortgage whenever I want?

Many mortgage deals will have an early repayment charge which can make it costly to move before the end of the deal. However, it may still be worth doing the sums to see if it pays off for you financially.

If you are on a standard variable rate you are free to shop around and move to the best possible deal whenever suits you as you are not tied in to any preferential rates.

Do I have to remortgage through my current lender?

Not necessarily, though they may be able to offer you a great deal and the process could be easier. When looking for a suitable remortgage deal, whether with your current lender or through shopping around, be sure to take note of any fees and additional costs and take these into account when comparing options.

An independent mortgage adviser may be able to advise you on the best deals and find a deal suitable to your finances.

What is the remortgaging process?

The process is no more complicated than applying for a mortgage in the first instance:

  1. Think about what you can afford to repay each month.
  2. Speak to an independent mortgage adviser who will be able to advise on all available mortgages to find the best deal.
  3. Once you have found a deal that suits, follow their application process, if this is with your existing lender they may do much of the paperwork for you.
  4. Choose a solicitor to handle any legal aspects relating to the mortgage/transfer of funds.

While remortgaging is fairly straightforward, it is worth noting that there are instances where remortgaging may be difficult. These include circumstances of negative equity, a poor credit rating and your age. Those aged 55 and over may struggle to get a remortgage deal covering them over 25 years for example.

At Smith Partnership Move, we handle all aspects of the property buying process, from supporting first-time buyers on to the property ladder to those building a property portfolio as well as homeowners looking to remortgage. Call us on 0330 123 1229 for more information.