Remortgage Information

A remortgage is the process of settling the balance of an outstanding mortgage and refinancing the same property with a new mortgage. Different lenders have their own criteria that applicants must meet as well as different interest terms, rates and remortgaging agreements.

Remortgaging your home is a decision that should not be taken too lightly. While thinking about when to remortgage, you should consider your current financial situation, whether a remortgage is necessary to release funds to pay off other debts or to reduce your monthly payments and how much equity is in your home.

You would also need to consider the interest rate that you are currently paying and whether or not remortgaging would break your current agreement and penalize you in any way. This is true in particular with fixed term rates.

It would be wise to seek appropriate remortgage advice before making any decisions. Your current lender will be able to arrange a consultation with one of their financial advisors who are specialists in remortgaging and refinancing.

You would need to ask can I remortgage - do not just simply assume that you can. Find out any implications you may come across if you are tied to a certain rate for a specific term. You would also need to know what remortgage offers are available, what kind of remortgage interest rates are on offer to you and once you are armed with this information, you can take some time to think about it.

There are also other means of locating mortgage advice such as remortgage and financial websites. There are many remortgage comparison websites available online that will compare the best interest rates and deals available to you, from the comfort of your own home.

It may be a good idea to have researched a remortgage comparison site such as Money Supermarket so that you can have some idea of what rates are available before paying a visit to your financial advisor.

If you decide that you definitely want to proceed with a remortgage, the first thing to do is to collect all the relevant documents – bank and mortgage statements. It is better to do this nearing the end of your current deal rather than leaving it until the last moment.

The next step is to find out how much it will cost you to remortgage, and whether or not there are any early redemption fees. You could always contact your lender and request an early settlement fee that includes any extra charges. Also make sure that you are informed of any restrictions on your current mortgage that may penalize you for refinancing.

You will then need to have a look at the current deals and offers on the market to find a remortgage plan that suits your needs. You can look into this by yourself, or enlist the help of a mortgage broker. Mortgage brokers can be very useful if you have a bad credit history or if you are applying for a self employed remortgage.

Once you have made a decision on what remortgage offer you want to apply for, have a look at what fees are involved. There may be legal fees, valuation fees or arrangement fees. You could be surprised at the costs involved that it may not prove beneficial to you to remortgage.

You then approach your lender and give them the opportunity to match or offer a better deal than the one you are looking to change to. When faced with the possibility of losing a good customer, you never know what the outcome may be unless you ask. It will save you money if they can at least match the offer.

If you get a negative reply from your current lender, you will need to make a fresh application with the new lender and provide proof of identity and income before they can make a decision. It is then a waiting game to hear the lenders reply, which will usually be in writing. You will receive an agreement in principle and then a survey of your home will be carried out. Once you have paid any associated fees with the application and the survey results have been processed, you will receive a mortgage offer from your new lender. The new lender will settle your old mortgage with your previous lender and then forward you a statement of completion.