What does remortgaging your home involve?

What does remortgaging your home involve?

If someone mentions remortgaging, especially in the current climate of high interest rates and soaring property prices, it can make even the most financially savvy borrower feel nervous. To put it simply, remortgaging is when you move your mortgage to another lender because your current mortgage deal is coming to an end or you’re looking to secure a more competitive interest rate. It may seem like it could be a complicated task, but here are some simple steps to follow to make it all go smoothly.
Do your research

As with any financial decision, it is always important to do your research and start the process as early as possible, especially as the mortgage market in the UK is fluctuating on a week-by-week basis. It is best to begin shopping around for the best deals and exploring different providers around six months before your current deal is due to end.

Also, don’t forget to ask your current lender to see what they have on offer as you may be able to switch to a new rate with them and avoid any extra fees or charges. These deals usually become active around 3 months before your current deal is due to end.

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Find out how much your house is worth

This is an important part of the process as how much your house is worth will influence the loan-to-value ratio (LTV) of any remortgage. For example, if your home is valued at £300,000 and your current mortgage stands at £150,000, your LTV rate is 50%. Currently, the best remortgage deals are for LTVs of 60% or below so finding out the value of your home could influence the affordability of your monthly payments.

Consider the costs

The costs can quickly ramp up when remortgaging, especially if you’re moving to a new lender. These charges can include booking fees, property valuation charges, conveyancing fees and early repayment charges. If you are looking for conveyancing solicitors quotes, contact specialists such as https://www.samconveyancing.co.uk/conveyancing-quote directly for information.

Obtaining an agreement in principle and applying for a mortgage

Gaining an agreement in principle from a mortgage lender will let you know how much you can borrow. Once you are happy with the remortgage deal, you can then put in a formal application.

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If you are using a new lender, they will want to see supporting documents to prove your income and other commitments. There will also be some legal work including transferring the charges register and bankruptcy searches, but the costs of these will usually be included in the remortgage deal. This can take some time, so always leave plenty of leeway before your current deal runs out.

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