Many homebuyers will find that their personal circumstances change during the time that they are paying off their mortgage. This means that the mortgage deal that was right at the time of purchase might not be the best for them now. If this describes how you feel about your mortgage you will want to read on to find out about remortgaging and how it may help.
Understand the reasons why you might want to remortgage
• When a short-term mortgage deal comes to an end. Finding a new mortgage with a good short-term deal can help you avoid the increase in monthly payments.
• If interest rates start to rise. If you would prefer not to have your mortgage payments affected by any interest rate rises, a move from a variable rate to a fixed rate mortgage will help.
• Change to a variable rate mortgage. If you are tied into a fixed rate mortgage with an interest rate higher than those available on standard variable rates, you could save money by switching.
In addition to the above reasons, another reason why people remortgage is to release equity in their home if its value has increased. When remortgaging to release equity, it is important to remember that arrangement fees can eat into the amount of equity that you will be able to release from the value of your home.
Do your homework and get some professional advice
Spend a couple of hours checking out the best available rates and deals on the internet. Remember to make use of the comparison websites like Money Supermarket and Go Compare amongst others. The deals on comparison sites are regularly updated and they can take a lot of the work out of searching individual banks and building societies.
Try not to get too involved in finding the absolute best rates available online – stick to a couple of hours’ research and leave it at that. Mortgages are complicated financial agreements and it can be confusing comparing them.
Make a note of the best deals that you find but don’t act on them yet.
When you have found a few deals that seem better suited to you, book an appointment with an independent mortgage advisor.
An independent mortgage advisor will look at your personal circumstances and find the mortgage deals that are best suited to your needs. Importantly, an independent mortgage advisor will offer advice across the whole of the mortgage market and may have knowledge of the latest deals that are not advertised elsewhere.
Speak to your existing lender
Many people forget to go back to their existing lender when remortgaging and it’s really important that you don’t. Arrange a face to face appointment with your lender and give them the opportunity to match or beat the remortgaging deals you have found. You should do this even if the mortgage rates they are currently advertising aren’t as good as the deal you have found; they may match the deal to keep you as a customer. In many cases it can be a whole lot easier staying with the same mortgage provider on better rates than it is to move to a new provider.
Making the application for a mortgage deal is the part of the process that many people find the most stressful. If you’re got a better deal with your existing lender, then things should go pretty smoothly, with a minimum amount of paperwork.
If you are taking up an offer that has been found for you by an independent mortgage advisor, you should find that the independent mortgage advisor will help you prepare your application and guide you through the whole process. The independent advisor will usually liaise between you and the lender during the application.
If you choose to submit the application yourself, you will need to complete the application form and should expect that you will need to provide documentary evidence of things like income and bank statements.
When remortgaging to a new mortgage provider, the new lender will often carry out a survey on your home to ensure that it is valued accurately.
Accepting an offer
When your application has been accepted by the new lender they will make a formal offer of a mortgage to you.
At this point, a solicitor is required to complete the legal aspects of the remortgage, including the transfer of money and completing paperwork. Most independent mortgage advisors will assist during this stage of the remortgage by liaising between the various parties to ensure that everything goes ahead smoothly without delay.