The act of switching from your current mortgage on your current house to another, whether with the same or a different lender, is known as remortgaging. The previous mortgage is subsequently replaced with the new one.
But, what is the remortgaging procedure like, when is the ideal time to do it, and what else should you think about during the process?
You may have to pay an early repayment charge to your existing lender if you remortgage.
When should remortgaging be considered?
Although you can remortgage at any time, there are several signs that point out the ideal moment for you to do so.
In search of a new mortgage product
Remortgaging may provide an opportunity to save money, therefore it's crucial to frequently assess your financial situation to make sure that your existing mortgage agreement still satisfies your needs.
Keep in mind that if you don't reach the end of your fixed rate period, you could have to pay an early repayment charge). Make sure you mention this with our advisers during the remortgaging process since they will be able to assist you in calculating it.
Your mortgage term is coming to an end
Being automatically switched to the lender's standard variable rate (SVR) after your existing agreement expires makes this the most frequent trigger for remortgaging. In order to avoid being charged this rate, you need typically begin the application procedure six months before the end of your current term.
Increasing your borrowing due to plans to renovate your home
You can remortgage your house to release part of the equity you've built up if you're intending to make renovations to your property. By taking out a larger loan, you can free up funds that you can use to pay for the renovation's expenditures.
How does it work?
The procedure you went through when filling out your initial mortgage application is comparable to the procedure you go through when remortgaging. Whether your situation has changed—for example, whether you're self-employed or are now on maternity leave—can also be a factor.
A mortgage adviser can guide you through the whole procedure and cut through the confusion surrounding the remortgaging process.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is £599.