Is it time to remortgage?

There are lots of reasons why you might be thinking of remortgaging your home. Your mortgage is likely to be the biggest ongoing financial commitment in your life, so it’s only right that you want to keep it in the best shape possible. If your current deal’s coming to an end, you could find a more suitable arrangement by shopping around.

Even if your mortgage has time left to run, it may be worth looking at the exit costs involved. Consider if your circumstances have changed, or if the interest rate has changes since you took out the original loan. If the savings you’ll make outweigh these costs, then it can still be a great idea to switch. On the other hand, if you’d like to pay more into your mortgage, you might need to change provider in order to do so. Whether you’re earning more at work or have received a windfall, there are plenty of reasons why you might want to pay off your mortgage sooner.

Another common reason for choosing to remortgage is if your property’s significantly increased in value. This can help to bring down your payments substantially. Or it can allow you to take some additional borrowing out of your home for something like an extension or a new car. Whether it’s one of these reasons or something else that’s making you look at remortgaging your home, read on for our step-by-step guide on how to go about doing so.

Remortgaging guide

It’s important that you select an experienced remortgage conveyancer who is going to help you achieve what you want to get out of the process, as quickly and efficiently as possible. When you’ve chosen your conveyancer, follow the steps below and you should be up and running in no time:

•  Instruct your conveyancer. Once given permission to begin the process, your conveyancer will check the legal status and title of your home. This helps to establish that your property fits the bill for a new mortgage.

• Check your current mortgage status. If there are any outstanding payments due on your current mortgage, then they must be repaid at completion. The total amount, which is effectively the cost of freeing yourself from your current deal, will be confirmed to your conveyancer by your current lender.

• Do your checks. Some mortgage lenders require your conveyancer to carry out local, drainage or mining searches, which can make the transaction slower and costlier. With others, it’s sufficient to take out indemnity insurance. If you need to have a search done, your conveyancer will discuss this with you and you will probably need to make a small upfront payment to cover the cost.

• Consider the offer. One of the most important steps is to go through the mortgage offer you receive from the lender. You need to check that all of the figures are accurate in terms of what’s outstanding on your mortgage, and the mortgage product you’re signing up to. And as well as making sure that the repayment method’s correct and checking any early repayment fees, you need to be sure that the amount you’re going to be paying will work for you during the period of the new mortgage.

• Sign on the dotted line. Once you’re happy with the terms of your remortgage, you’ll need to sign the new mortgage deed along with any other documentation required by your new lender. It’s best to return this to your conveyancer as quickly as possible, to avoid any delays.

• Prepare for any shocks. Make sure that you fully understand all of the terms and conditions of your new offer. For instance, if the new mortgage amount’s less than what your existing lender’s owed, you’ll be expected to make up the difference. This will need to be paid before the completion date, so make sure you don’t give yourself any nasty surprises.

• Go over things. After completion, your conveyancer will register the new mortgage at the Land Registry and provide proof of this to your new lender, as well as deal with various mortgage security issues.

Sometimes there may be certain situations which add slight complications to the remortgaging process. However, with guidance from your conveyancer, they shouldn’t prove to be too much of a problem. For example, if there’s been a breakdown in a relationship, this can mean that the ownership of a property changes. As things can get quite complex, it’s important to have an experienced conveyancer that knows what they’re doing.

Another area which requires some extra steps is if your property is leasehold. If this is the case, your landlord will have to confirm that all ground rent, service charges and insurance premiums are up to date, where applicable. The wording of the lease will need to be approved by your conveyancer, while your landlord will also be provided with notices concerning your existing and new mortgage.

Whether the process is straightforward or has a quirk or two that needs ironing out, remortgaging your home can be a great way to improve your finances.