Which Home Improvements Add Value to Your House

Do you want to save money on your monthly mortgage payments? Of course, you do. Remortgaging – switching mortgage providers – is one option available to you. But what does remortgaging entail? Read on for the answers.

Why would you want to switch mortgage providers?

The main reason people change mortgage providers is to save money. Different mortgage lenders offer different deals with different interest rates, so you could save quite a lot of money each month by reviewing the terms of your current mortgage and researching your remortgage options.

According to Sally Hamilton (the Guardian) remortgaging can do several things including:

  1. Provide cheaper interest rates and cheaper monthly mortgage payments. Be aware, however, that sometimes this requires increasing your mortgage term, which could end up costing you more in the end.
  2. Release some of the value of your property, which you can use for other noble purposes, like renovations, which will hopefully increase the value of your home.
  3. Reduce the mortgage term, so you can pay off your mortgage sooner.

The remortgage application process

Most of the actions you take in the property market require some research and remortgages are no different.

Start off by familiarising yourself with your current mortgage deal. Find out about any charges or fees that might be associated with remortgaging your house, such as early redemption charges (ERC) and exit fees. You should also find out what fees are involved in making the switch; for example, there are additional legal (conveyancing) fees, valuation fees and application or arrangement fees.

Research the different mortgage deals available, especially as they pertain to remortgages. You can do this by using mortgage comparison sites, remortgage calculators or by talking to an independent mortgage broker or a remortgage advisor from your lender.

Brokers or advisors will explain all the options, including the types of remortgages available (tracker, fixed-rate and variable), the payment options (repayment, interest-only and combination), as well as the flexibility each option offers, so you know whether you can overpay your mortgage or take a repayment holiday.

Once you’ve chosen a new mortgage provider and the deal that best suits you, it’s a good idea to ask your current lender if they can match your remortgage package. Many lenders are willing to renegotiate mortgage deals to keep your custom, and that saves you the whole remortgaging application process.

If they can’t match the deal you can submit your application to your chosen provider. The whole process starts with an Agreement in Principle, which basically says that your chosen lender is willing to remortgage your house. Then you can submit the official application form.

Remortgage applications require a whole lot of supporting paperwork, so ensure that you have your property’s details, your bank details, proof of ID and address, proof of employment, proof of assets, proof of debts and proof of income (especially if you’re self-employed), as well as the most recent mortgage statement and a redemption statement from your current provider. Bear in mind that your new lender will conduct a valuation (which may or may not be more comprehensive than the valuation conducted by an estate agent) and a conveyancer will also have to get involved.

After all that it’s a waiting game. Remortgaging your home can take between one and two months to complete, so be patient.

Changing mortgage providers isn’t as complicated as you might think and remortgaging can provide plenty of financial benefits. However, there are several associated costs that you might not have considered, so it’s best to talk to a mortgage broker for some expert advice on whether or not a remortgage is right for you.

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