What is Remortgaging?
Put simply, remortgaging is moving from one mortgage deal to another. According to Martin Lewis (MoneySavingExpert) around a third of UK home loans are remortgages. In this guide we explain why people choose to remortgage their properties, outline how the process works and help you decide whether you should remortgage your property.
Why do people Remortgage their property?
Most homeowners tend to remortgage when their introductory mortgage deal ends so that they can secure a better deal before being transferred to their provider’s Standard Variable Rate (SVR) mortgage. However, many people chose to remortgage their property to consolidate their debts, to gain a more flexible mortgage, or to change mortgage types from an interest-only to a repayment mortgage.
How does Remortgaging work?
- Ending your current mortgage and finding a new lender: to remortgage your property you’ll first need to exit your current mortgage agreement and identify a new lender.
- Gain agreement in principle: this is typically quick and easy and can be done online through the lender’s website. An agreement in principle (AIP) is not legally binding nor is it a guarantee, but it gives you a clear idea of what is a realistic deal you can obtain from your new provider.
- Applying for a new mortgage: once you’re happy with the AIP you’ve received from your chosen lender, you’ll need to formally apply for a mortgage. This will require you to go through a credit history check, your house will need to be valued, and you’ll need to submit some background documentation, specifically:
- Proof of income
- Information about outgoings and liabilities
- Proof of residency
- Instructing a solicitor: you’ll need to find a solicitor to help you handle the paperwork and transfer the title of the property.
- Completion: once your mortgage is agreed your solicitor will undertake a local authority search and put in place search indemnity insurance. They will also organise the transfer of debt to the new lender and register the new lender’s details with the Land Registry.
Whilst the process of transferring mortgage providers is relatively straightforward it can take several weeks and requires you to carefully assess your financial situation.
Sell your house for cash to SmoothSale
Simply enter your details below to get a no-obligation cash offer for your house.
Should I remortgage my property?
Deciding on whether remortgaging is right for you depends on the reason why you’re choosing to remortgage. However, before you start, you’ll need to carefully read the fine print of your current mortgage. Sometimes provider’s charge a hefty fee for you to exit your agreement.
If you’re remortgaging to consolidate your debts you’ll need to consider:
- Will you end up paying more in the longer term? Borrowing over the long timescales associated with mortgages makes repayments seem affordable on a monthly basis. However, because interest is charged on the sum over such a long period of time it can often increase the total repayment amount unnecessarily. If this is the case you should consider alternative methods of paying off your debt such as changing your credit card or negotiating a repayment plan with your existing creditors.
- Are you putting your home under unnecessary risk? Remember, your mortgage is secured against your home. If you fail to meet repayments, then your property is at risk. You need to be sure that you can afford to keep up with repayments to avoid repossession.
- Could you end up in negative equity? If your home value drops significantly then it can mean that you owe more money than your property is worth. This makes selling the property very difficult and puts you in a risky financial position.
How can Smoothsale help?
Whilst remortgaging your property can be relatively quick; it can be an expensive way to consolidate your debts and it could mean that you end up paying more over the longer term. If you don’t want to take on the stress and expense associated with remortgaging your property, then SmoothSale can help. Our cash house buyers service is designed for vendors looking for a guaranteed sale of their property in as little as 7 days. Alternatively, we offer an ‘Investor Marketing’ route to market for vendors who want to sell their property to our network of trusted investors in under 30 days.
Get a cash offer today! Alternatively, get in contact on 0113 539 600 or email firstname.lastname@example.org.
Can I remortgage if I have a fixed-rate mortgage?
Absolutely! While there may be some early repayment charges, it’s possible to remortgage even with a fixed-rate mortgage.
How often can I remortgage my property?
There’s no set limit on how often you can remortgage. However, it’s essential to consider any associated fees and the potential impact on your credit score.
Will remortgaging affect my property taxes?
No, remortgaging typically doesn’t affect your property taxes. It’s a financial adjustment related to your mortgage terms.
Can I remortgage if my property’s value has increased?
Yes, an increase in your property’s value can be advantageous for remortgaging, allowing you to access better deals and terms.
How long does the remortgaging process take?
The timeline can vary, but on average, the remortgaging process takes between four to eight weeks, depending on various factors.
Are there government programs to assist with remortgaging?
Yes, some government programs offer support to homeowners looking to remortgage. Explore available options based on your circumstances.