The Process of Remortgaging: What You Need to Know 

Remortgaging is the process of paying off your current mortgage by switching to a new mortgage with a different lender. There are many reasons why homeowners may choose to remortgage, including wanting to take advantage of lower interest rates, releasing equity, or consolidating debts. Whatever your reason for remortgaging, it’s essential to understand the process and make an informed decision. 

In this guide, we will take a comprehensive look at the process of remortgaging, from evaluating your current mortgage to preparing the necessary paperwork, and completing the remortgage. We will also provide tips and insights to help you navigate the remortgaging process and make the right decision for your financial situation.  

Whether you are looking to save money on your monthly mortgage payments, release equity for home improvements or consolidate debt, this guide will provide you with everything you need to know about the process of remortgaging. 

Evaluate your current mortgage 

Before you start the process of remortgaging, it’s important to evaluate your current mortgage to determine whether it’s the right time to switch. Some factors to consider include: 

Interest rates: Check your current mortgage rate and compare it with the current rates on offer. If you can save money by switching to a lower interest rate, remortgaging may be a good option. It’s worth noting that interest rates can change quickly, so it’s important to keep an eye on them and act fast if you see a good deal. 

Equity: If your property has increased in value since you took out your current mortgage, you may have built up equity. Remortgaging could allow you to release some of that equity and use it for home improvements or other purposes. However, if your property has decreased in value, remortgaging may not be the right option as you may end up owing more than your property is worth. 

Fixed rate period: If you’re currently on a fixed rate mortgage, it’s important to know when the fixed rate period ends. This will help you to avoid any early repayment charges if you decide to remortgage before the end of the fixed rate period. It’s also worth considering whether you want to switch to another fixed rate or a variable rate mortgage. 

Consider the costs

Remortgaging can involve a range of costs, including: 

Arrangement fees: Many lenders charge an arrangement fee when you take out a new mortgage. This fee can vary greatly, so it’s important to factor it into your calculations. 

Valuation fees: The lender may require a valuation of your property to determine its current value. This can also vary depending on the lender and the type of property. 

Legal fees: You may need to pay for a solicitor to handle the legal aspects of the remortgage. Some lenders offer free legal fees as an incentive, so it’s worth shopping around to find the most suitable deal. 

Early repayment charges: If you’re still in the fixed rate period of your current mortgage, you may need to pay an early repayment charge if you remortgage. These charges can be significant, so it’s important to weigh them up against the potential savings of remortgaging. 

Shop around for the most competitive deal 

When remortgaging, it’s important to shop around and compare different mortgage deals to find the one that’s right for you. Some factors to consider include: 

Interest rates: Look for a mortgage with a lower interest rate than your current mortgage. However, it’s important to consider other factors such as fees and charges. 

Term: Consider the length of the mortgage term and how it will impact your monthly payments. A longer term may result in lower monthly payments, but you’ll end up paying more in interest over the life of the mortgage. 

Fees: Look for a mortgage with low fees and charges. Don’t just focus on the arrangement fee, but also consider other fees such as valuation fees and legal fees. 

Prepare your paperwork 

Once you’ve found a suitable mortgage deal, you’ll need to prepare your paperwork to apply for the new mortgage. This will include: 

Proof of income: You’ll need to provide evidence of your income, such as payslips or bank statements. Make sure you have several months’ worth of statements and that they are up to date. 

Proof of identity: You’ll need to provide proof of your identity, such as a passport or driving licence. Make sure your ID is up to date and that it matches the information on your mortgage application. 

Proof of address: You’ll need to provide proof of your address, such as a utility bill. Make sure the address matches the one on your mortgage application. 

Apply for the new mortgage

Once you have all of the necessary paperwork, you can apply for the new mortgage. The lender will review your application and assess whether you meet their criteria. This may involve a credit check and an assessment of your affordability. 

Complete the remortgage

If your application is successful, you’ll receive a mortgage offer from the new lender. You’ll need to review the offer carefully and make sure you understand the terms and conditions. Once you’re happy with the offer, you can accept it and proceed with the remortgage. The new lender will pay off your existing mortgage, and you’ll start making payments on the new mortgage. 

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. 

Final Thoughts

Remortgaging can be an effective way to save money on your mortgage and achieve financial goals, such as releasing equity or consolidating debt. However, it’s essential to carefully evaluate your current mortgage, consider the costs involved, shop around for the most competitive deal, and prepare your paperwork before applying for a new mortgage. It’s also important to seek advice from a professional mortgage adviser to ensure you make an informed decision. 

Aspire’s Advisers can help you through the process of remortgaging. Our team of experienced mortgage advisers can help you evaluate your current mortgage, shop around for the most suitable deal, and guide you through the application process. Contact us today to find out more. 

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. 

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 26th May 2023