What is remortgaging?
Remortgaging is when you replace your existing mortgage with a new one, while staying in your property. You can remortgage with your current mortgage lender or with a different provider. But you should make sure to shop around, as there are many different deals on the market.
Starting the process of remortgaging can seem daunting. And we know you’ll want to be sure you’re making the right financial decision. This is where our property solicitors could help you.
Do you need a solicitor to remortgage?
If you’re switching to another mortgage but staying with your current provider, there will be no need for you to instruct a solicitor. But if you’re going to be changing lenders, you will need a solicitor to handle the legal paperwork involved.
As well as transferring your title deeds to your new lender, your solicitor will search the terms of your new mortgage offer and let you know if there’s anything you should check before proceeding. They will also ensure your existing mortgage can be paid off on time, so you won’t run into any issues.
We work with specialist property and mortgage solicitors who are experienced in this area. They will speak to you about your individual situation and help you work out the best course of action.
How does remortgaging work?
If you’re not sure how to remortgage your house, it can be difficult to know where to start. We’ve broken down the process into four key stages:
- Arrange an Agreement in Principle (AiP)
Similarly to when you’re buying a house, you’ll be able to get an idea of how much you can borrow before you start the remortgaging application process. While it’s not guaranteed that you’ll be approved, it will give you a good idea of where you stand. - Think about the costs involved
Depending on the terms of your existing mortgage, you might be charged a fee for leaving. These fees can be expensive, so it’s worth checking this before proceeding. You’ll also need to consider other remortgaging costs like valuation and solicitor fees. - Start your application
When you’ve made the decision to remortgage, it will be time to start your application. You’ll be asked for personal and financial details, as well as information about your current mortgage. - Complete your remortgage
A credit check will be carried out to confirm your financial circumstances and a property valuation will be arranged. If you’re changing to another lender, your solicitor will arrange for the transfer of title deeds to your new provider.
When can you remortgage?
It’s possible to remortgage at any time. But as we’ve mentioned, it’s important to check the terms of your existing mortgage arrangement. Your lender might charge you for leaving early, so you should consider whether this cost will be worth it in the long term.
You might also want to think about how much equity you have in your home. This is the difference between the value of your property and the amount you owe on your mortgage. Generally speaking, the more equity you have, the more likely it is that you’ll get a better remortgage deal.
As everyone’s circumstances are different, there is no blanket answer to when you should remortgage. This is why we would suggest speaking to a mortgage broker beforehand. They’ll be able to let you know if now is the right time to go ahead, and which deals would suit you best.
What is the cost of remortgaging?
We’ve already mentioned the potential cost of leaving your current mortgage deal. But this isn’t the only expense to bear in mind. Some other charges to consider include:
- Arrangement fees
This is a fee charged by your lender for setting up your new mortgage. It can cost around £1,000 but for more competitive mortgage deals, it could be higher. You can pay this fee outright or add it to your mortgage. But bear in mind that although adding the fee to your mortgage will spread the cost, you will be paying more in interest. - Conveyancing fees
If you’re switching to a new lender, your title deeds will need to be transferred to them. This requires the services of a registered solicitor, who will carry out all the necessary paperwork on your behalf. Solicitor fees vary, but they can cost around £350. - Valuation fees
Your new lender will want to know how much your property is worth before they offer you a mortgage. This is because they’ll want to be sure that if you’re unable to make repayments, the sale of your house would make up for their loss. Some lenders offer free valuations, but others can cost up to £400.