Want your remortgage questions answered? We don’t blame you. Remortgaging might sound like a scary prospect, but if you’re in the position where you’d like to pay off certain debts, cut the length of your mortgage, or reduce your monthly mortgage repayments, getting a remortgage on your property could be the way to go. It could also help you free up some funds in order to do things you might not otherwise be able to afford – like get building work done on your property.
Remortgaging is the process where you leave your current mortgage lender and move over to another one. In theory it sounds quite simple, but as with all house-related dealings, it can be quite a lengthy process. In order to ensure everything goes as smoothly as possible, it’s vital you’ve got a good credit score.
Thanks to the harsh economic climate we’re currently enduring, banks and building societies aren’t so free with their lending these days. That means, it’s more important than ever for you to have a credit history that lenders will look favourably on.
So first things first, it’s time to get your admin in order. The best time to start thinking about remortgaging is about six months before the end of your present mortgage. It may sound like a long time, but the more time you have to get your paperwork together, the less stressful the process will be.
As every mortgage is different, you’ll also need to make sure you check the terms and conditions of your current one. The small print will be the place to look to find out if there are any exit fees, or early redemption charges. Some of these fees can be quite substantial, and once you’ve taken them into consideration it may turn out that remortgaging your home would actually make you worse off, so check all the small print before you go ahead and commit.
Once you’ve considered all of these things, and you’re sure your credit score is in good order it’s time to take a look at the mortgages out there. Fixed rate. Variable. Tracker – whatever sort of mortgage you’re considering it makes sense to check them all out. Compare deals, speak directly to lenders, and spend time doing your research. It’s a rarity that the first mortgage you come across is the best one for your circumstances, so don’t rush into things too quickly. You can also use a mortgage calculator like this one at the BBC.
You’ll also need to think about extra fees that you could encounter along the way. Fees such as lender fees can be anything around the £400 mark, while valuation fees and application and management fees can both come in at about £300 depending what deal you’re looking at. Fees like these can often be tagged on to your new mortgage but it will mean your repayments rise so make sure you’re fully aware of all such fees.
Once you’ve decided to go ahead, your lender will conduct a survey on the property you want to remortgage. Once they’re satisfied they’ll send you their mortgage offer and will then deal direct with your current mortgage provider. Now’s the point where you can breathe a sigh of relief as all your hard work is over.
All in all, if everything goes to plan and there are no glitches anywhere along the route – did we mention, make sure your credit history is gleaming – then the whole thing should take about a month from start to finish.