Remortgaging is a natural part of homeownership with most people having to do it at some point in their lifetime. By 2025, the remortgaging market will be worth a whopping £58 billion, showing just how lucrative it is for lenders.
The process of remortgaging your property may seem like a headache to begin with but with the right guidance, you’ll see just how simple it really is. To help, we’ve put a handy guide together, highlighting some of the reasons why you may remortgage and the benefits associated with it. Continue reading to find out more.
Why would I need to remortgage my home?
There are several circumstances where you may wish to remortgage a property you own. Here are some of the main reasons:
- Your fixed-rate mortgage deal is almost finished
- You’re concerned about interest rates and want to get a better mortgage deal
- Interest rates are better than when you first took out your mortgage
- You’ve built up a lot of equity in your home
- You want another type of mortgage
- You want to reduce your mortgage length
What are the benefits of remortgaging?
Remortgaging offers homeowners plenty of benefits, including:
- You can get lower monthly repayments
- You can take control and have peace of mind about your ongoing costs
- You may be able to pay your mortgage off faster
- You could borrow more money
- It can be a great way to consolidate your debt
What is the process for remortgaging a property?
Last year, around 1.4 million people remortgaged their properties and most will have done it using the following steps:
Ask your lender for a closing balance
The first step is to find out how much you have left to pay. Your current lender should be able to tell you this.
Find a conveyancer
Next, instruct a conveyancer to help you through the process. These people will be responsible for finding the best deal for you, so you can ensure your remortgage is successful.
Value the home
After you’ve found a dependable conveyancer, get an accurate valuation of your home. This will be needed during the mortgage application process.
Apply for the new mortgage
The next step is to complete your mortgage application. This will be sent to a lender and you’ll be either accepted or denied the new mortgage.
Some of the things they’ll need include proof of ID, proof of address, details about your income and spending habits, and any outstanding loans you may have. Get this information together before starting the application to make the process easier.
Ensure you know all costs involved
While remortgaging is necessary in most circumstances, it’s important to know the associated costs of doing it. Try to put funds to cover these costs to one side to ensure your remortgage doesn’t put you in a tough financial position. Here are the main expenses to consider:
- Mortgage application fee
- Valuation fee
- Solicitors fee
