Remortgaging Your Property
When looking at mortgages online, you might have come across the term remortgaging.
While many homeowners have at least heard of the concept, many are still unsure about what it means, when to do it or what the benefits of remortgaging a property really are.
In a nutshell, remortgaging is changing from one mortgage deal to another and, while there are a thousand reasons why it can be a great idea, it is something you have to be careful about. You have to make sure that you’ve done your research and know that it’s the right time to switch.
Want to know more? Keep reading to find out all about it.
Reasons to Remortgage
While there are many reasons to remortgage, we’re going to cover the most common ones for now.
To Get a Better Mortgage Rate. This is probably the most prolific reason. Many people who take out fixed-rate mortgages choose to remortgage once their rate comes to an end to avoid automatically ending up on a standard rate afterwards. Luckily, if you’re already searching for mortgages online, then you should come across remortgaging calculators as well. These online tools are great for giving you an insight into what your monthly payments could be in the long term if you switch deals.
A Change in Financial Situation. Changes in financial situations can happen at any time for a number of reasons. From injury, to being made redundant, to the death of a partner, you can quickly find yourself unable to keep up with your mortgage payments. If this does happen, it’s best to speak to your lender to see what options are available to you. Remortgaging will probably be one of them.
Consolidating Debt. If you have multiple large debts, then keeping on top of all your outgoings can get tricky. Many people in this situation choose to combine all their debts into one by using their property as security. While a common tactic, you should always make sure to consider your financial situation carefully beforehand. After all, your property is at risk and your home may be repossessed if you fail to keep up your mortgage repayments.
Making Home Improvements. People remortgage their property to get the funds for many projects, but one of the most common investments is in home improvements, such as turning it into a smart home. To many, it makes the most sense, as any improvements you make should increase the property value in the long term and therefore have a high ROI.
Whatever reason you may have to remortgage, it is always important to do your research thoroughly beforehand. While all of these are significant reasons to switch mortgage product, it’s crucial that you make sure it’s the right time and the best financial decision for you.
Consult a Mortgage Broker
With any significant financial decision, it’s always best to consult an expert. While not legally necessary to complete any kind of mortgage transaction, receiving advice from a broker can stop you from making a big mistake and losing thousands in the long run.
Mortgage brokers act as the middle ground between you and the lender and have access to a wide range of deals on the market. They’re great to use if you want the best overview of suitable mortgage products that you could qualify for. If you’re thinking of remortgaging, a mortgage broker will be able to look at your current financial situation and assess whether remortgaging might be the right strategy for you.
If you’ve already been looking for mortgages online, you might have come across internet mortgage brokers. These tools are useful to get an overview of better mortgage deals for you and how much you might end up paying month to month. However, while convenient, they generally can’t give you much detail into each deal, nor can they tell you if you’ll be accepted as they usually don’t ask for too much information to get started. This is where a physical mortgage broker comes in.
By getting more information about you, they can calculate all the fees involved when taking out a new deal as well as the real cost of the introductory period. More importantly, they’ll be able to see if remortgaging is the best idea for you or if you’re best staying with your original lender and just swapping deals, often known as ‘product transferring.’
The Application Process
If you’ve done all the necessary research and found that remortgaging is the best option for you, then it’s time to apply.
First things first, you must be aware that your application will be subject to a credit check and your previous mortgage will be taken into consideration. Even though you already have a mortgage, your credit score may have drastically changed by the time you apply, especially if you’re remortgaging to try and clear multiple debts. Any lender may also want to take a look at your property to confirm its value and that it works as security for them.
If you process your application through a mortgage broker, you’ll have the benefit of not having to chase your own paperwork, with many services offering weekly updates during the whole process.
You’ll also need to find a suitable solicitor to handle the transaction for you as they will be the one turning your property from one lender over to the next. What they will do specifically is entirely dependent on the mortgage product you choose. Some deals come with ‘free legals’ so you’ll be provided with one while others will require you to source your own. Make sure to find out if you’ll need to source one before you start applying to save yourself a headache down the road.
Ultimately, it’s up to you whether you want to remortgage your property or not. While there are many benefits to finding a new deal, it’s vital that you do your research first. Assess your financial situation, all of your mortgage options and perhaps enlist the help of a mortgage broker to make sure you’re making the best decision for your property.