Remortgaging

What is remortgaging?

To arrange a remortgage, you take out a new loan on your home to replace your existing mortgage or to borrow money against your property.

As remortgaging can save you thousands of pounds, it pays to look at the best deals on the market. This is particularly relevant in the current economy, with interest rates rising.

How can mortgage solicitors help?

It can be challenging to complete a remortgage application on your own. But specialist property and mortgage solicitors are there to make the necessary conveyancing process run as smoothly as possible.

They’ll ensure that all registrations are completed with the Land Registry, all checks are completed and that your old mortgage is paid off.

There are occasions where you won’t necessarily need a mortgage solicitor. If you’re just switching from your current lender’s standard variable rate to a fixed-rate deal, there is no legal work required. However, if you’re switching to a new lender, you’ll need the services of qualified mortgage solicitors.

How do I remortgage my house?

Remortgaging involves several steps. Specialist mortgage solicitors will help you manage the process.

• Your mortgage lender will stipulate that you find a solicitor. You must then advise your legal team of the lender’s requirements.
• Your lender will make an offer to remortgage, in the same way it would for a standard mortgage. Your solicitor will check title documents, obtaining office copies from the Land Registry.
• Your mortgage solicitor will carry out a number of searches on the property. This will include access rights over the property, mining privileges and any other issues that could affect the value of the property.
• The deeds are drawn up and signed by you. Your mortgage solicitor must then register the mortgage with the Land Registry.

How much will remortgaging cost?

The cost of remortgaging will vary depending on factors like your solicitors’ fees, arrangement fees, valuation fees and any other charges.

Some mortgages have higher initial fees, but lower rates. If you are looking to secure a good rate, you may have to pay more than £1,000 in fees.

Among the fees you can expect to pay are conveyancing fees, a Land Registry fee, a bankruptcy search and a copy of the title. Some mortgage lenders will provide a legal service for free, but if you are paying for it, you have the right to appoint your own property and mortgage solicitor.

How should I prepare to remortgage?

You should start looking at new mortgage deals well in advance of your fixed rate period ending. It’s possible to lock in a new rate up to six months prior to the end of your deal. But this is potentially a risk as rates may improve in that period, and you’d be locked in to the one you’d already chosen.

As with your first mortgage, you’ll need to ensure your credit rating is strong enough to get the best rates available. If your rating is too low, you’ll struggle to be accepted for the best deals. This means you should be checking your credit score and working to improve it, if necessary.

It might be a condition of your new mortgage that your house is subject to a valuation. If so, ensure your property is in good condition and well maintained. The valuer will look at the structural integrity of your home and take some rough measurements. They typically won’t pay too much attention to décor or tidiness but making the property easily accessible will make their job easier.

Why should I remortgage?

There are several reasons you might think about remortgaging, including:

• Your current deal is ending soon

If you’re currently on a fixed rate deal and it’s about to end, you could benefit from surveying the mortgage market and finding out if there are any better deals available. That’s because once you come to the end of your deal, your monthly repayment will likely shoot up and you’ll be paying far more in interest than you currently are.

• You’re on your lender’s standard variable rate

If you’ve been on your lender’s standard variable rate for a while, you may want a better rate. It’s a good idea to start looking around for a better deal as soon as you can in this situation.

• You want a more flexible mortgage

You may need to take a break from repaying your mortgage. This can be done through a payment holiday, which could give you some breathing space as you change jobs or retrain, for example.

• You want to overpay but aren’t allowed to

You may be in a position to make overpayments, but your existing mortgage provider will penalise you for doing so. You could remortgage to a new lender, who will allow you to make these additional repayments without charge.

Why might I not want to consider remortgaging?

Remortgaging isn’t always the best option. If you’re still within your current lender’s fixed rate period, you may be subject to early repayment charges.

The best deals may not be available to you if you have a low credit rating.

You also risk increasing the overall cost of your mortgage if you extend its term. And you could lose your home if you can’t keep up with the monthly repayments.

So it’s important to carefully consider whether this the right decision for you and your circumstances.

I want to remortgage – what do I do?

Remortgaging is not something you should do without prior consideration, so it's a good idea to seek legal advice at an early stage.

First4Lawyers can ensure that your remortgage goes smoothly and that all the legalities are taken care of.

Whether you're looking to benefit from a new rate, or you want to release some of the money tied up in your property, get in touch with us today. We’ll put you in touch with our expert mortgage solicitors.