Remortgaging is something that has become more common in recent years, due to the many benefits it can provide.
However, remortgaging can also be a little complicated and something that many of our clients have raised questions about.
So, in this article, Conveyancing Partner Michelle Petersen answers some of the most common queries around remortgaging and looks at the pros, cons and costs.
What is remortgaging?
Remortgaging is where you change the mortgage deal on your property.
There are many reasons why you might want to remortgage your home, such as getting a better deal on interest rates or to pay for home improvements.
What are the benefits to remortgaging?
Remortgaging can allow you to:
- Change mortgage deal to lower your interest rate
- Release equity from your property to fund home improvements or pay off debts
- Switch to a new lender
- Change to a more flexible deal which allows for mortgage overpayments (and is better suited to your needs)
- Switch to an offset mortgage to reduce your monthly bills
Remortgaging can save you a lot of money if done right.
Can you remortgage to another lender?
When you remortgage, you do not have to remain with the same lender, and it is good to shop around for good interest rates.
Although, it may be worth discussing with your current lender as to whether there are any benefits by remaining with them.
What is the downside of remortgaging?
When you remortgage, the term of your loan may increase and your overall debt owed may increase so this is something to consider when assessing your finances.
In addition, the potential fees involved in remortgaging can also be a major drawback. We outline which costs are involved later in this article.
Our property team would be happy to discuss your specific circumstances with you over the phone and provide tailored advice, so you can find out whether remortgaging would benefit you.
Call us on 01202 499255 or fill out the form at the top of this page.
What is the process of remortgaging?
Below we’ve outlined, step-by-step, the process of remortgaging.
Finding a lender
You would need to shop around and find which lender provides the best product for your requirements.
You can use a comparison site, such as comparethemarket, uswitch or moneysupermarket, to help you compare lenders or contact a mortgage broker who can provide you with advice as to which mortgage product best suit your needs.
Instructing a solicitor
You would then instruct a solicitor and provide them with details of your old and new lender.
Completing the process
If you were to instruct us, we would request a redemption statement for your old lender.
Next, we’d go through your new mortgage offer and submit searches, if necessary.
On completion we would then request your new mortgage monies, repay your old mortgage and send you any balance, if necessary.
Do you need a deposit to remortgage?
Most of the time, you won’t need to put down a deposit to remortgage your property.
However, some lenders may specifically require you to put one down; or you might need to if there is some existing loan that needs paying off.
What costs are involved in a remortgage?
- Legal fees
- Land Registry Fee to register the new mortgage
- Search indemnity insurance or searches
- Any product fees
- Lender fees
- Your new lender may charge you to set-up your mortgage with them
- Your current lender may charge you if you repay your mortgage early – this is known as an early redemption penalty
- Broker fees
At Frettens, we’re always transparent with our legal costs and will be up front with you from the outset.
We offer a free initial chat for all new clients where we can discuss with you what costs you may need to pay when remortgaging, both legal and any other costs (e.g. lender fees), and can give you an estimate at this stage.
Can you remortgage a buy-to-let?
Yes, it is possible to remortgage a buy-to-let property. Read our dedicated article on doing so here.
Do you need a solicitor to remortgage?
That depends!
If you are changing your lender for the remortgage, you will need to instruct a solicitor.
If you are remaining with the same lender, they will advise you as to whether you are required to instruct a solicitor.
You can find out more about our services by navigating to our remortgaging page here, or by getting in touch using the information below.
Specialist remortgaging solicitors
At Frettens, our Specialist Residential Property Team is one of the largest in the area and would be happy to assist you in remortgaging.
We have bright, modern and accessible offices in Christchurch and Ringwood, but our excellent IT systems allow us to work with clients from all across the country.
You can get in touch with us for a free initial meeting by calling 01202 499255 or filling in the form at the top of the page.
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