Mortgages can seem difficult to navigate, and they can sometimes feel like you’re locked into the same product for years and years – but this isn’t the case. Just as you’d review your car insurance each year to ensure you’ve got the best deal, you should ensure you have the best mortgage product to suit you.
Switching to a more suitable deal on your mortgage is called remortgaging, and can be done at any time. It’s undeniably one of the biggest loans you’re likely to take out, so it’s important to make it work best for you.
When should you remortgage?
You can look into your mortgage options up to six months before your current mortgage product expires.
If a remortgage is deemed affordable by the lender, it could:
- Ensure you have the best interest rate
- Reduce the number of years left on your current mortgage
- Extend your mortgage term out to make your mortgage more affordable
- Allow you to take out further borrowing for home extensions or windows
- Pay off a Help to Buy loan
- Allow you to buy more shares in a shared ownership
- Enable you to buy a second home
- Enable you to consolidate other finances
Please contact us if you need to raise finance for other reasons, or use our live chat on the bottom right hand corner of our website.
Perhaps you want to remortgage, but you’re not sure if you can due to a change of circumstances since taking out your previous mortgage. For instance:
- You have changed jobs
- Your missed a credit card payment
- You’re on maternity leave
- You now have children
- You have childcare costs
- You are now self-employed
- You have new loans or credit cards
A mortgage advisor will search a lender’s criteria to try and find a product that matches your new situation. If however you are unable to move to another lender, your current lender will be able to switch you onto another product within the lender’s range. This should be at a cheaper rate than the variable that you will revert onto.
How does remortgaging work?
The remortgaging process can be very simple if you go through an experienced broker and advisor.
Speak to your advisor to complete a fact find, or you can download and complete a fact find online here. This is the process of getting an idea of where you stand financially by assessing factors such as your incomings and outgoings.
Then, you’ll need to supply relevant documentation to support the information gathered in your fact find. This includes:
- Passport (or another accepted form of ID)
- Proof of address
- Current mortgage details
- Payslips from the last three months, or accounts and tax returns if you’re self-employed
- Proof of any commission or bonuses
- Bank statements
The mortgage advisor will recommend your options, and you’ll discuss what your preference would be.
The mortgage advisor will complete a decision in principle with the recommended lender and then submit a full application. A lender will do a valuation (often remotely, without needing to go the property), and assess the documents needed for the application. If all is accepted, an offer will be issued.
Any legal paperwork is completed if it’s required and a date is set for the new mortgage product to be activated. If you’re remortgaging to pay off a Help to Buy loan or staircasing out of a shared ownership, there is an extra stage and the remortgage process will be longer due to the third party involvement.
If you are paying back a loan, you need to contact Help to Buy or the Housing Association to let them know that you want to repay the loan, so they can complete the paperwork in-house. You need to obtain a RICS valuation report to supply to them so that you both know the amount that is to be raised to repay them.
If you would like more information or would like to speak to one of our remortgage specialists please get in touch with us here at Mortgage Light today. We have staff that specialise in shared ownership, new build, remortgage and buy-to-lets. We understand the timescales that are imposed on buyers and work alongside you to try and make the transaction as smooth as possible.