How does remortgaging work?.

How does remortgaging work?

First things first: what is remortgaging? Put simply, remortgaging is when you switch to a new mortgage deal when your current deal comes to an end. Why remortgage? Benefits range from moving to a deal with a better rate, to releasing money to carry out home improvements, consolidate debts, assist family financially or purchase investment properties. Want to know how it works? Here’s Winwell’s expert guide.   

The remortgaging process

1. Establish the current mortgage balance and your objectives.  
2. Speak to a mortgage broker who can shop around for the right deal.
3. Consider the costs

Remortgaging involves expenditure: 

•    Arrangement (product) fees
•    Booking/Application fees
•    Valuation fees
•    Solicitor’s fees

4. Some lenders will offer an Agreement In Principle

Whilst some lenders offer an Agreement In Principle (AIP) for remortgages, it isn't always a standard part of the process and you may be able to proceed directly to full application. 

5. Apply for your new mortgage

Found a good deal? Now you need to apply for the remortgage. 

6. Your lender will run a credit check

7. Your property will be valued

Following your application, the lender will arrange a valuation to ensure the property is worth what you’re planning to pay for it.  

8. The new lender will send you the mortgage offer letter 

Ensure the details are correct before you accept it.

9. A solicitor or conveyancer will manage the transfer of your mortgage

Your solicitor requests the money from the new lender and uses it to pay off your old mortgage. Your solicitor will then register the new mortgage at the Land Registry. Once the title is registered, your solicitor will send you a copy and send the original document to your lender.

Why switch mortgage deals?

•    Save money by moving to a deal with a better mortgage rate. This could result in serious savings depending on your circumstances. 
•    To avoid expensive standard variable rates. When your fixed rate ends it’s normal to move to the lender’s standard variable rate, which can be higher than competitive market rates. Starting the remortgage process several months before a deal expires can often help avoid moving onto a lender's standard variable rate. 
•    Certainty about monthly payment amounts. If you want fixed monthly payments, you might remortgage to a predictable fixed rate. 
•    Release capital from your property. You might remortgage to borrow additional money to make home improvements, consolidate your debt, buy investment properties or gift money to family. 

What lenders look for during a remortgage application

-    Your credit history
-    Your income 
-    Property value and condition
-    Your existing mortgage and payment history. 

At London-based Winwell Financial Consultancy, we support every client with their remortgage. If you’d like expert assistance, just get in touch. 

We typically charge a fee of £500 for advising on and arranging your mortgage. Our fee will be payable upon receipt of your offer. We will also receive commission from the lender.