The Remortgage Process: Everything You Need to Know

Signing a contract

Remortgaging is a big decision, and not one to take lightly – but it could save you a lot of money. At Good Move, we’re all about financial transparency, so we’ve we’ve put together a comprehensive guide on how to remortgage. Find out how much it could cost, how to find the best remortgage deals, and everything you’ll need to consider before you go ahead. No matter where you are in the lifetime of owning a house, there’s plenty of financial terminology to get used to, so we’ll try to keep this jargon-free.

In this guide:

What is remortgaging?

If you’re a first-time homeowner, you may not be familiar with the process. Simply put, remortgaging is the process of changing your initial mortgage supplier, and moving to another mortgage product from a different provider. Most people remortgage in order to save on monthly payments, as you can shop around and compare the best mortgage rates and the best remortgage deals from different suppliers – some of which may be more competitive than the rate you’re currently paying. It’s different to porting a mortgage, as you’re not transferring your current deal to a new property – instead you’re taking out a brand new mortgage deal.

When is it a good idea to remortgage?

If you’ve been with your current mortgage lender for a while, you might be paying more than you need to on your monthly repayments. Once your fixed-rate mortgage rate expires, you’ll be paying variable rates, which can be higher based on the current state of the economy, inflation, and interest rates. Finding better remortgage deals can save you money every month, which may allow you to save more, or just improve your quality of life.

However, there are lots of reasons to remortgage – here are some of the main reasons:

  • Your current fixed- term rate is about to end, and you don’t want to pay a variable rate.
  • You’ve done a remortgage comparison, and found a better rate on the market you’d like to access.
  • You want to overpay your mortgage, and your current provider won’t allow you to without incurring lots of fees.
  • To consolidate debt – if you are considering this, be careful and speak to a debt organisation like the Citizens Advice Bureau to make sure you’re not putting yourself at risk.
  • To release equity in your house, allowing you to raise a lump sum while still continuing to live in your home

How do I remortgage?

If you’re not sure how to remortgage, here are a few must-follow steps that will help guide you through the entire process.

Get advice

Don’t go it alone – if you get advice from a qualified financial expert, you’ll have extra protection from the Financial Ombudsman Service. If your new mortgage or advice turns out to be unsuitable, you can complain to the FOS. If you make all the decisions without advice, you won’t be able to complain if something goes wrong.

Check your credit score

When you remortgage, you will essentially be going through the same application process you had to pass to get your current home, and that includes all of the credit checks and stress testing that you’d expect. You can check your score for free through sites like Clearscore and Experian – so make sure you’re not setting yourself up for disappointment before you even reapply.

Check for hidden costs

If you’re leaving your mortgage and switching before the end of your deal, you might have to pay a fee, called an early repayment charge – and on the other side, you might have the usual legal, valuation and administration costs to pay. Start looking for the best remortgage deals with no fees well before you decide to make the move – otherwise, when you’re debating between providers for a remortgage comparison, you’ll have to factor in how much moving your mortgage provider will cost. If it’s in the thousands, you might negate any savings you’d make by paying a slightly lower rate.

How to find the best remortgage deals

So, you’ve decided that you’d like to look at other offers out there on the market, and remortgage your home. Follow our top tips on finding the best mortgage deals, and hopefully you can make yourself a nice saving.

Start searching early

Remortgaging is a big decision – and as with any big life decision, especially one involving money or your home, it’s vitally important to do plenty of research ahead of time. You’ll want to find a new provider well before your switching date – the last thing you want is to add extra stress by leaving it close to the wire.

Get your timing right

Most mortgage lenders will allow you to secure a rate up to three months ahead of time – but you won’t have to start actually paying the mortgage right away. So if your current mortgage deal is ending in April, but you find a great remortgage deal in January, you can lock in the better rate and continue paying off your current mortgage until your term is up, and avoid paying any fees to leave your deal early.

Ask your current provider if they can match your new deal

After you’ve looked at remortgage calculators, worked out your fees, and looked at the best remortgage deals you can access, you’ll have your final calculations. At this point, it’s always worth reaching out to your current mortgage provider, as they may be able to match the best remortgage deal you can find. This can save you tons of time and money, as you won’t have to switch providers or go through lots of admin.

Apply for your new mortgage

If you’re ready to take the plunge and remortgage, first make sure you’ve covered your bases – check back over this guide, make your calculations, and work out any hidden costs. Then, all that’s left to do is apply, and wait for your chosen lender to accept your application.

Remortgaging might be a nerve-racking process, but as long as you’ve followed all the steps in this guide you should be standing in good stead to get a great remortgage deal.

Alternatively, if you want to sell your home quickly, contact the experienced professionals here at Good Move to receive a cash offer in 24 hours, or head over to our blog for more home selling inspiration.

 

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