How does remortgaging work?

The act of remortgaging can be a wise financial move, whether it is to get a better interest rate on your mortgage or to consolidate your debts into one payment.

However this decision cannot be taken lightly, and you should investigate thoroughly to ensure you are getting the best remortgage deal. There is competition within the marketplace for your business, so shopping around could save you money

Once you have an idea of what kind of deals are out there, you can contact your current lender and see what they will offer you so you can work out if it’s worthwhile switching to a new lender.

So if you already have a mortgage on your home and are in the market for a remortgage, read on as we delve into more detail in this step by step guide.

Remortgage process

The remortgage process is less involved than buying a new home and it may be easier than you think. However, it is still a decision that deserves a lot of thought before going ahead.

A good place to start is to think about what you’re hoping to achieve by remortgaging. For example, are you looking to save money by getting a lower interest rate than you’re currently paying?

If your initial deal has ended or is about to end, remortgaging can help secure the best new deal and potentially save you money.

However, there are other costs that need to be considered when remortgaging. You may be charged set ups cost for your new deal such as an arrangement fee, valuation fee or legal fees, however lenders will often offer deals with low or no up-front costs. If using a mortgage broker, some may also charge you a fee for their advice, unless you use a fee-free broker such as London and Country.

How long does it take to remortgage?

Remortgaging is typically a quicker process than buying a new home but it can still take some time so plan ahead.

Step 1 –Shop around
If possible, give yourself plenty of time to do your research and find the right deal. Most lenders allow you to apply and secure a rate for 3 months before you complete, which means you can move straight across to your new deal when your old one finishes. There are a lot of products on the market and they can disappear fast, so using a broker like L&C can help speed up the search.
Step 2 – Decide which deal is best for you
Think about whether you want a rate that goes up and down as interest rates change, or if you would prefer to guarantee your monthly payments for a period of time by fixing. Remember not to focus entirely on the interest rate on offer, you should also take into account any fees you will need to pay.
Step 3 – Submit your application
When you submit your application, you will be required to provide proof of identification, proof of income and details of your outgoings. It will save time if you are prepared, so get together at least 3 months payslips or accounts, your passport or driving licence, and bank statements before you apply. Submitting your application through a mortgage broker is useful as they can help you through the whole process and deal with the lender on your behalf.
Step 4 – Assessment
Before agreeing your mortgage, a lender will need to assess your income, financial commitments and outgoings to make sure the mortgage will be affordable. They will also look at your credit rating and carry out a valuation of your property.
Step 5 – Offer and Completion
After carrying out all of their checks, the lender will then provide you with a mortgage offer. Your conveyancer will undertake all of the necessary legal work and take the process through to completion by arranging for the funds to be transferred to your previous lender. If you are borrowing additional money, to consolidate other debt or carry out some home improvements for example, the extra will be paid to you.
Whatever the reason for remortgaging, talking to a fully qualified mortgage broker can help you find the best deal. They can also advise on how much you can afford to borrow – whilst giving you expert advice about which mortgage best fits your needs and circumstances.

If you are interested in remortgaging your property, or you just want to see which options are available to you, then give L&C a call. Our expert advisors will be able to find the best option for you and your property, quickly and hassle free.

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