Wondering if you could ask your lender for a new deal on your loan? Remortgaging is a great way to release equity or secure a better rate on your mortgage for the remainder of your mortgage period. On average, nearly 39,000 homeowners remortgage every month in the UK.
What is remortgaging?
Remortgaging is the act of switching your existing mortgage to a different deal, either with the existing lender, or a different lender, while staying in the same property.
Even if you’ve had a mortgage for years, it’s important to think about your financial options thoroughly. Remortgaging is worth the time, especially when you know what to expect.
Let’s look at the steps to applying for a mortgage and getting the best deal for your circumstances:
Step #1: Think about why you wish to remortgage
Most homeowners remortgage to cut the costs of their monthly repayments, especially when they come close to the end of their short-term deal. However, there are other reasons to consider when remortgaging:
- To release cash from equity tied up in your property.
- To switch from Standard Variable Rate (SVR) mortgage—which allows the lender to change the rate whenever they want—to fixed rate mortgage, in order to get certainty on monthly payments .
- To consolidate debts.
- To get a cheaper deal that knocks thousands from your annual payments.
Step #2: Review your circumstances—how much do you owe?
Check your current mortgage statement to figure out how much of the debt is outstanding. This outstanding figure is important, since you need the new loan to pay off this existing amount.
It’s also a good idea to check the value of your property to determine the loan-to-value (LTV). LTV ratio tells you exactly how much you’re borrowing against collateral. Simply put, it’s the lending risk that lenders examine before approving a mortgage.
Moreover, an important part of remortgaging is comparing the costs. Compare the monthly fee with what you currently pay along with other upfront costs to see if it’s all worthwhile.
Step #3: Complete the remortgage application
Your application will be subject to a credit score check by the prospective lender. Plus, the lender may also visit the property to establish its value.
It’s a good idea to hire mortgage specialists for this step. Our remortgage experts will ensure your mortgage application is complete and presented correctly. We will make sure that the application is processed by the lender as quickly as possible, all the while keeping you updated throughout the process.
Get in touch with us today for more information.
Your property may be repossessed if you do not keep up repayments on your mortgage
Some buy to let mortgages are not regulated by the Financial Conduct Authority