Remortgaging your home

Work with a mortgage broker 

 

Getting a remortgage application into a lender is easier than an initial mortgage, yet it's still rather complex, which is why you're always best to work with a mortgage broker. With access to the whole of the mortgage market, they discover the most suitable deals out there. In doing so, they help you save potentially thousands of pounds per year.

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Check when your current mortgage deal ends

 

The first thing to do is check when your current mortgage deal ends. If you're currently on a fixed or discounted deal, you will be transferred to your lenders standard variable rate when it ends. This means that you will be paying significantly more in interest, which is why it's a good idea to remortgage. You can look for a new deal up to six months before your current deal ends to lock in the best remortgage deal early.

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Get your current property valued​

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When remortgaging, it's important to get your current property valued. If your property value is higher than when you bought it, you will have a lower loan-to-value ratio on your borrowing, as you have gained equity in your home. Lower loan-to-values lead to lower interest rates being offered by lenders.

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You could reduce your monthly repayments

 

A lower loan-to-value can lead to lower monthly repayments due to lower interest rates being offered. This can save you a lot of money by paying less interest on your mortgage. New mortgage deals become available every day. If interest rates are lower six months before the end of your current deal term, it might be worth switching early. It might even be a good idea to speak to a mortgage broker six months before your current deal ends, so they can keep an eye out and wait for the best remortgage deal to become available.

 

You could reduce your mortgage term

 

Some people like to reduce the mortgage term as much as they can by overpaying on their mortgage. Unfortunately, many lenders place early repayment charges in their terms to prevent people from doing this and restrict overpayments to 10% of their balance each year. This is why some people wish to remortgage. They would like to remortgage to a deal that allows larger overpayments without the early repayment charges. These overpayments are paid directly on the capital balance, which in turn reduces the total amount of interest paid and reduces your mortgage term. 

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​You could borrow more money

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Not all people are looking to stick to their current mortgage value and save money; Instead, they are looking to borrow more money when remortgaging. A common reason for this is home improvements, such as an extension or a new kitchen and bathroom. Your monthly repayments will go up if you increase your borrowing; however, the amount they go up by will depend on the interest rate on the new deal when you remortgage.

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Do you need a conveyancing solicitor for a remortgage?

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Whether you need a conveyancing solicitor for your remortgage depends on whether you're staying with your current lender or switching to a new one. If you are remaining with your current mortgage lender and are switching to a new deal with them, a conveyancing solicitor is not required. This is known as a product transfer and requires no additional legal work. If you remortgage with a new lender, then you will require a conveyancing solicitor. Some remortgage deals include a free legal package, which means their chosen conveyancing solicitor will cover the legal requirements, but do check that it's free. If it isn't, then the rough conveyancing costs for a remortgage are £300-1000.

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There is no Stamp Duty paid for a remortgage

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As you aren't purchasing a property, no stamp duty is paid when remortgaging. The only time you will pay stamp duty when remortgaging is when a transfer of equity takes place. This involves changing the legal ownership of the property, such as adding or removing a partner from the title deeds.

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Broker Fees

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Mortgage brokers typically charge between £300 and-£600 for their remortgage services. For remortgages that are simply product transfers with your current lender, I charge a flat broker fee of £300. For remortgages that involve switching lenders, transfer of equity, or borrowing more, I charge a flat broker fee of £500. Payment is made when your remortgage application has been successfully approved. All meetings, such as affordability, introductory, and your remortgage application, are free. If you wish to ask questions or have meetings with me, then there is no charge.