A Handy Guide to Remortgaging

Remortgaging is the process of changing the existing mortgage arrangement that you have on your property. You can remortgage onto a new deal with your current mortgage lender or switch to a different lender. There are numerous scenarios where someone might consider remortgaging.

In this guide, our award-winning Conveyancing Team take you through the various situations that a decision about remortgaging might occur, the legal obligations, things to be aware of and when you will need a solicitor.

Reasons to Re-Mortgage

• Because your current mortgage is coming to the end, i.e. you are on a 2-year fixed deal
• To secure a better deal on a lower interest rate
• To change from a variable rate to a fixed rate, in response to the market
• To change from a fixed rate to a variable rate, in response to the market
• To change the length of time you are borrowing for your mortgage
• You want to release equity and free up cash from your home
• You want to borrow more money for an extension or major home improvements
• Your relationship has ended and you need to change your mortgage from joint to single
• You are in a new relationship and need to add your partner onto your mortgage
• Someone you have a joint mortgage with has passed away
• You are moving house and need to borrow more money
• You are unhappy with the customer service from your current lender

When do you need a solicitor to remortgage?

If you are nearing the end of your fixed term deal and are simply looking to renew your existing mortgage for another set period or are switching between a fixed and a variable rate with your current lender, then you do not need a solicitor.

This can be arranged, usual over the phone, post, online or in your bank branch. They will already have your details, so there is a likely to be a small amount of paperwork to sign and return.

However, if you are changing mortgage providers completely because you have found a better deal, your circumstances have changed, you are extracting funds or you are moving house – then you will require a solicitor to ensure that the new mortgage is registered against the legal title and make sure that Land Registry reflects the changes.

It is worth keeping in mind that some lenders might include a legal package that will cover the legal costs as part of their remortgage deal. Check whether this is the case. Whilst this can save you some money, the solicitor they appoint, is not going to be your local firm that you know and trust. Some people will opt to still select their own for transparency and peace of mind.

Renewing Your With Your Existing Mortgage Provider

You should have the end of your mortgage term in the back of your mind as it is important to know when your term is coming to an end so that you can research your best options.

If you are coming toward the end of your fixed term. (i.e. you fixed to benefit from regular monthly payments at a set rate for 2 years, 5 years etc.) you will receive a letter / email from your current lender explaining the process, outlining the current mortgage rate offer and the paperwork to complete.

They will contact you in advance to allow plenty of time to switch and process the paperwork.

Make sure that you keep your paperwork in a safe place and don’t forget to take action! If you fail to respond to your renewal then you are likely to go onto a variable rate, which depending on the market, could be unfavourable and see your monthly repayments shoot up significantly.

Simply follow the steps and you will receive confirmation of your new terms. Keep your paperwork stored somewhere safe.

Finding the Best Deals

The best deal for you will depend on your own personal circumstances. Your earnings, credit score, the amount you need to borrow, equity, etc, will all factor into the rate you can obtain.

It will also depend on the type of mortgage product you are willing to take out – fixed-rate, tracker or variable.

There are numerous comparison websites that you can scour for the best deals. It is also worth speaking to your bank, your current provider or an independent mortgage broker. A broker may have access to mortgage deals that are not available on the whole of market and can advise you based on your own situation and affordability.

Take a look at:

https://www.comparethemarket.com/mortgages/

https://www.moneysupermarket.com/mortgages/

https://www.moneysavingexpert.com/mortgages/

When is it not suitable to remortgage?

It is important to seek financial advice based on your own set of personal circumstances. There are some situations where it is best to stay put rather than switch providers. This might include when:

• You are tied into a fixed rate
• The fees to switch are more than the savings you will make by switching
• Affordability is an issue
• Your circumstance have changed since the mortgage was agreed that may make you less favourable to lend to

What costs are involved in remortgaging?

The costs involved will vary from lender to lender, and will be higher if you require legal advice or a valuation.

Most lenders charge a mortgage arrangement fee or product fee of around £1,000. Some will allow this to be added to the mortgage borrowings. Others may have additional ‘admin fees’ or early exit or early repayment charges.

How long does it take to remortgage?

A typical remortgage of a standard, freehold property should take between four and eight weeks to complete. A leasehold property or anything more complicated could be a little longer.

Timescales will vary depending on the lender, any checks or surveys that are required, the speed of your solicitors (if needed) and how responsive all parties are to paperwork.

Things to be aware of when remortgaging

• Don’t leave it too late! Waiting until your current deal ends is a mistake that people make. You need to secure a rate before your term ends otherwise you risk being put onto an unattractive rate and seeing your monthly payments increase rapidly.
• Loyalty doesn’t always pay. You could be saving money by switching to a new provider – it’s a competitive market and there are deals to be done.
• Don’t take out credit just before your renewal. Avoid taking out a new credit card or signing up to any buy-now-pay-later deals leading up to your mortgage renewal or house move. This will trigger a credit check and could negatively impact you.
• Arrangement Fees aren’t always bad. Don’t be put off from a lender because they charge an upfront fee. Looking a fee-free only might not give you the best rates overall.
• Get paperwork in order quickly. When your mortgage comes up for renewal you will be offered a rate. This can change and it can be risky to leave it too late. Be cautious to the market rates and patterns.

Remortgage Solicitors

Whether you are moving house, looking to release equity or changing the ownership structure of your home. Our friendly, award-winning conveyancing team are by your side to help guide you through the process.

We have been helping people with their property affairs for over 200 years and have the knowledge and expertise to give you confidence in choosing Bell Lamb & Joynson.

To talk to us about your remortgage or obtain a quote, please contact us on 03444 124 348. Alternatively, you can complete our remortgage estimate online and get a personalised estimate in just a few clicks.

Please note that you home may be repossessed if you do not keep up with your mortgage repayments on a mortgage or other loans secured against you property. Seek advice, be realistic with affordability and think carefully before remortgaging or taking out a mortgage for the first time.