Remortgages

Most mortgages have a fixed term for repayments or interest rates and when this deal or offer comes to an end, you will pay your lenders Standard Variable Rate. This may see your monthly repayments increase and you may pay substantially more over the remaining term of your mortgage. 

A home or house remortgage, or remortgage for a commercial or buy to let property can involve:

• Remortgaging with your existing lender but moving to a new deal
  or
• Remortgaging with a new mortgage lender against your existing property

A remortgage can reduce your monthly payments, overall interest rate or help you access funds for home improvements.

Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.

You should consider remortgaging if:

• Your current mortgage deal is coming to an end
• You’re looking for a better interest rate on your mortgage
• You’d like to fix your monthly payments
• You’d like to make overpayments to shorten your mortgage term (which your current deal may not allow)
• You’d like to borrow more money
• Your home has increased in value and your loan-to-value ratio may now mean you can get a better mortgage deal

There are pros and cons to remortgaging and it may not be right for everyone. The mortgage market place is complex and getting good advice is essential.

In theory, there is no restriction on the timing of any remortgage arrangement, although you may face early repayment charges if you leave your existing deal before the term end. When negotiating any mortgage, you should check the charging structure, which may include early repayment fees. Remortgaging on a regular basis can have a detrimental impact on your credit score, but in theory, there are no restrictions. You should seek advice from a mortgage broker if you’re looking to remortgage. They will be able to assess the impact of early repayment fees and any upfront remortgage fees.

The process for remortgaging is exactly the same as a normal mortgage and you will still need a solicitor to look after the paperwork. Among other things, this will involve the transfer of funds once the remortgage has been approved and amendments to the title deed. Some mortgage providers will offer legal services as part of their package although you are not obliged to use them, and can appoint your own solicitor. 

The process of remortgaging your home is fairly straightforward:

Research mortgage deals

There should be a financial benefit for you to remortgage your property, whether a fixed term is coming to an end or there are better rates available.

Consider remortgaging costs

You would normally remortgage your property when your existing deal is coming to an end, thereby avoiding early repayment fees. In some cases, it may be beneficial to pay the early repayment charge to achieve a better long-term rate for your mortgage.

Apply for a mortgage in principle

The next step is to apply for a mortgage in principle to see whether remortgaging is going to be possible. While not a legally binding agreement, unless there are extenuating circumstances, any formal arrangement would likely be very similar.

Legal formalities

Appoint a solicitor to review the remortgaging process and ensure that all of the legal formalities are in place.

Formal property valuation

Just prior to approval of your mortgage application, the lender will require a formal property valuation to confirm the loan-to-value ratio.

Completion

On completion, you will receive funds from your new mortgage lender, which your solicitor will use to repay the original mortgage. The title deeds will be adjusted, any balance of funds (equity release) forwarded to you and the formal process draws to a close.