How Does Remortgaging Work?
How Does Remortgaging Work?
Your step-by-step guide to switching to a better mortgage deal
Remortgaging your home means exchanging your existing mortgage product for a different one, usually from a different lender. You’re moving your mortgage but staying in the same property.
Remortgaging is different to arranging a homeowner loan, because the latter involves keeping your existing mortgage agreement and taking out an additional, entirely separate secured loan.
Mortgages are the biggest financial commitments most people ever make. So if your current mortgage product isn’t serving you very well or you believe your monthly repayments will soon increase, you may want to seriously consider remortgaging. Finding a more suitable deal isn’t too hard with expert help and can have significant financial benefits.
To give you a clearer understanding of how remortgaging works, we’ve created this straightforward guide. People across Devon rely on The Mortgage Shop’s independent remortgaging advice, so please get in touch with us if you have any queries.
Key Reasons to Remortgage
Many of our Devon remortgaging clients change their mortgage product to save money on monthly repayments. For example, if you’re near the end of your fixed interest rate term and want to avoid the lender’s less attractive standard variable rate, you could look for a lower-rate deal.
Another reason why you might want to remortgage is to move to a more flexible agreement; for instance, one that allows you to make overpayments without high fees, so you can be mortgage-free sooner.
You could remortgage to release some of your equity (the cash tied up in the portion of your home you own outright) and use the funds to pay for home improvements or other major outgoings. Or you could consolidate existing debts to streamline your financial affairs.
Remortgaging – Main Steps
As an independent mortgage broker, we’re ideally placed to guide you through each stage of the remortgaging process.
1. Searching the Mortgage Market
There are thousands of UK mortgage products, so it’s advisable to consider options from your current lender and others to make sure you don’t miss an excellent deal.
Our mortgage advisors can search the whole market (including broker-only deals), identifying the most appropriate products for your circumstances. This is easier, faster and less stressful than searching on your own.
2. Calculating Costs and Savings
If you remortgage with a new lender, you’ll need to be aware of certain fees (most of which won’t apply if you stay with your current lender). For example, early repayment charges, legal costs (though some products include free legal work) or completion fees.
We’ll help you to calculate the costs, as well as work out how much you’d save each month by remortgaging. So you can decide whether the long-term benefits outweigh the set-up costs.
3. Decision in Principle
We can assist you in obtaining a Decision in Principle from your chosen lender.
This isn’t a firm offer from the lender, but shows approximately how much you could borrow, so you’ll have a good idea of where you stand.
4. Application Process and Legal Work
If you want to proceed, the next step is to complete the application process and legal work.
There’s a lot to think about, particularly if you’ve chosen a new lender. You’ll need to pass a credit check and provide documents related to your income, current mortgage and home insurance.
You’ll also need to work with a conveyancing solicitor or licensed conveyancer, whose key tasks include checking the status of your existing mortgage agreement and liaising with the Land Registry.
Thankfully, you can rely on us to assist you – and do much of the paperwork.
5. Property Valuation and Lender’s Offer
Property values can change a lot. In Devon, the average sale price has increased by 18% since 2019, according to RightMove.
Your chosen lender will arrange a valuation of your property to confirm its current value and check it provides enough security for the loan.
All being well, the lender will approve your application and make a firm offer. We’re on hand to provide any support you need.
6. Completion
If you accept the offer, a completion date will be set. That’s when your old mortgage deal is paid off and new one begins.
It typically takes just one or two months to go from application to completion, and using an independent mortgage broker can make the process as smooth as possible.
Remortgaging – Help for Devon Homeowners
As the largest independent mortgage broker in Devon, we have considerable experience of helping homeowners to review their remortgaging options and find the right deal.
Thinking about remortgaging? Contact us today for tailored, impartial advice.
Standard Health Warning & Regulatory Statement
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured against it. All loans subject to status. Ask for a personalised illustration. You may be required to pay a broker fee depending upon the type of mortgage recommended. Registered in England and Wales 3110231 – Registered Office: Sommerville House, 30 Southernhay East, Exeter, Devon EX1 1NS. The Mortgage Shop is a trading name of The Mortgage Shop (Exeter) Limited which is authorised and regulated by the Financial Conduct Authority. FRN 302305 Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.