When you took out your first mortgage it may have seemed like a complicated process, so you may be dreading the time when it comes to remortgaging. But the good news is that the process is a lot simpler - and typically cheaper - this time around.
However, don’t expect it to be extremely quick and cost-free. Remortgaging your home can still cost you money and may take a few weeks to go through, but understanding all the various procedures and formalities should hopefully make the process as pain-free as possible.
Step 1: Review your current mortgage deal
The initial stage in the remortgage process is to review your current mortgage. If you think you can get a better deal by moving onto a better rate or moving to a different lender, you’ll need to check the terms of your current mortgage.
It’s fairly straightforward to move your mortgage if you are on the lender’s standard variable rate (SVR), but if you are tied into a deal you can expect to pay early redemption charges. This is usually a set fee plus a percentage of your outstanding debt.
It’s best to speak to your lender to find out exactly what your current redemption penalty would be, but don’t let these exit penalties put you off remortgaging. In many cases, the savings you can make by switching to a lower monthly payment can outweigh any penalties you have to pay.
Step 2: Compare mortgage deals
You don’t always need to move to a different provider in order to remortgage – it’s always worth speaking to your own lender to see if they can simply move you onto a lower rate.
However, don’t disregard all the other products on the market. It may be that another lender can offer you a much better deal, whether it’s finding a mortgage with a lower rate or one that is better suited to your current circumstances.
Make sure you compare like for like when calculating the savings and take into consideration the overall cost of the mortgage over the term as well as any arrangement and valuation fees you may be expected to pay.
The right mortgage for you isn’t always the cheapest mortgage – it will depend on your circumstances and they all have their advantages and disadvantages.
Speaking to a mortgage broker will take the hassle out of the search for you. With access to the whole of the market, an independent broker can search through a wide range of mortgage products to find the best deal for you and can also help you with the application process.
Step 3: The application process
Once you’ve had a look at the current deals available, reviewed your current mortgage and weighed up the pros and cons of remortgaging, then you’re probably in a position to take the next step and apply for your remortgage.
Here’s a summary of the process you’ll need to go through:
Read more: What is a Decision in Principle
How much will the remortgage process cost me?
A remortgage doesn’t usually cost you as much as taking out your first mortgage, but there are plenty of costs you need to be aware of – although depending on the circumstances you shouldn't need to pay all of them.
For example, as you already own your property, there’s no need to pay Stamp Duty again, as this is just a one-off cost each time you buy a new property. The expenses you will need to consider include:
How long is all this expected to take?
The simplest remortgages - i.e. switching to a lower rate with the same lender - can take a few weeks just to complete all the necessary the paperwork, but it can take longer if you are switching providers and you are waiting on valuations and searches to take place.
However, once you see the benefits of remortgaging you will hopefully feel rewarded for your efforts.
Our trained expert advisers have access to the UK’s leading lenders and using their knowledge and skills will place you with the most suitable leader and product for your needs.