How to Remortgage Your Home

Remortgaging your home can sound like a complicated process, but it doesn’t have to be. A mortgage shouldn’t be a one-and-done; it should instead be something that you re-evaluate at the end of a fixed or tracker term. In the same way as you’d review your car insurance each year when your policy ends, you should take a look at your mortgage when the term ends to make sure you’re getting the best deal for your situation.

How does remortgaging work?

Remortgaging is a much easier process than you might imagine, especially with the help of a mortgage adviser and broker.

You can look into your mortgage options up to six months before the term of your current mortgage product expires. If you want to remortgage before this term ends this is possible, but you may have to pay early repayment fees.

The whole process usually takes between 4-8 weeks. Here’s how it works:

Step one:
Speak to your mortgage advisor and complete a fact find (you can download a fact find online here). This will assess financial factors like your incomings and outgoings to give you an idea of where you stand.

You’ll need to supply supporting documents to back up the information from your fact find. These can include:

• Passport or driving licence (or another accepted form of ID)
• Details of your current mortgage
• Bank statements and payslips from the last 3 months (including proof of commissions or bonuses). If you’re self-employed you can provide accounts and tax returns instead of payslips
• Proof of address

At this point, your mortgage advisor will be able to recommend some options that should be available to you and should work for your situation.

Step two:
A ‘decision in principle’ will be made with the recommended lender, and your mortgage adviser will submit your full application.

The lender will then assess your documents and do a valuation of your property (which is often done remotely). If the terms are accepted, the lender will issue an offer.

Whilst remortgaging is usually simpler, quicker and easier than getting your original mortgage was, you’ll need to appoint a solicitor to help you with the legal proceedings and the paperwork.

Step three:
With the solicitor’s paperwork completed, a date can be set for the new mortgage to start.

If you’re remortgaging to staircase out of a Shared Ownership or to pay off a Help to Buy loan, there will be an extra step here (and the process will take a little longer). This is because of the involvement of a third party – either the Help to Buy lenders or the other owners of the house.

You’ll need to get a RICs valuation report so that both you and the third party know how much money will be needed to repay them. If you’re paying back a Help to Buy loan, you’ll either need to contact the Housing Association or Help to Buy so that they know you want to repay the loan and can complete their end of the paperwork.

Why should I remortgage?

Whether you’re remortgaging for a better deal, to pay off a Help to Buy loan or other debts, or to help you raise funds for home improvements, remortgaging is a straightforward process.

You may want to remortgage if:

Your current deal is about to end
If the fixed-rate term of your mortgage is ending, you may be put onto your lender’s Standard Variable Rate (SVR). This is likely to be higher than your previous interest rate, and higher than other rates you may be eligible for. If you’re worried about these higher/variable rates, you can remortgage to a cheaper rate.

You want to change the terms of your mortgage
There are a few ways you might want to change your current mortgage:

1. You want to borrow more – there are many reasons you might want to borrow more on your mortgage. Whether you want to raise funds to pay off debts, to make home improvements, buy a second home, or for something else, remortgaging is possible. Be prepared for your lender to ask for evidence of where the money is going. For example, if you’re consolidating funds to build an extension, you can show the lender quotes from builders and your planning permissions.
2. You want to overpay – some lenders won’t allow you to overpay, but over the years after buying your mortgage, it’s likely that your situation will change and you’ll be able to afford a bit more each month. Remortgaging can allow you to either find a deal with a lender who will let you overpay or help you find a shorter mortgage where you make higher monthly payments.
3. You want to extend the length of your mortgage – if the opposite is true and you’re finding the monthly mortgage payments to be a bit of a stretch, when you remortgage you can go for a longer mortgage (e.g. 30 years instead of 25) so your monthly payments decrease.

The value of your home has increased
If you’ve made a lot of improvements to your property and it’s risen in value since you took out your mortgage, you might find that you’re now in a lower loan-to-value band. This means you’d be eligible for lower rates. Keep in mind that unless you’d make a pretty big saving, the cost of remortgaging could negate the savings you’d make. A mortgage advisor can help you figure out what the best options are for you.

How can a mortgage advisor help you?

Here at Mortgage Light, we have experts that specialise in remortgaging and we aim to make the whole process easy and stress-free for you. We believe that mortgages and remortgaging should be simple, and we want to make the entire process as smooth as possible.

Think of remortgaging a bit like shopping for a car; you wouldn’t go into the first dealership you saw and buy a car on the spot – you’d want to evaluate your options. A mortgage adviser and broker like Mortgage Light can help you see and understand all the available options for your remortgage and narrow down your choices for you by understanding your situation. We’re on your side and want to help you get a mortgage that works for you. Get in touch with us today.