A mortgage is a long-term financial commitment. But, a lot of homeowners don’t really understand how re-mortgaging works. Remortgaging is the process of moving what you owe with your current mortgage lender either within the same lender, but onto a new interest rate product, or by moving across to an entirely new lender and interest rate product. This is a short guide which (we hope) will help you understand the process of remortgaging a property.
Most homeowners decide to remortgage their property to try and cut the cost of their monthly repayments or to borrow more money. Others may want to switch the type of mortgage they are on, for example from a variable mortgage to a fixed rate mortgage, to get certainty on the monthly repayments.
A mortgage broker will be able to assess your situation. Taking professional advice when remortgaging is a good idea, as not only are they an expert in their field, they will be able to source the best mortgage deals on the market while taking into consideration your eligibility for each lender. Whilst looking at the different mortgages available, a mortgage broker would look at any fees applicable when taking out the mortgage and the true cost over the ‘introductory period’ offered to be able to establish whether you would save money by re-mortgaging when taking into consideration any associated costs, or if you would be better off staying with your current lender and just swapping the deal you are on (this is known as a Product Transfer).
At Zing Mortgages, we look at the entire mortgage package to ensure that the advice we provide is not only accurate but the best advice for you and your circumstances.
If you would prefer to manage the remortgaging process yourself, then you need to make sure that you take all of the charges into consideration, which include, but not always limited to:
• Valuation Fees
• Arrangement Fees
• Exit Penalties
To determine whether you will save money or not you need to add up the monthly repayments on your prospective new mortgage over the term of the new deal and then compare them to what your current mortgage will cost you over the same period.
An important thing to remember is that the cheapest deals are not always the best deals. You need to consider your circumstances. For example, if interest rates are going to drop significantly over the next few years, then maybe looking at a variable rate would suit you. If however you feel there is uncertainty with regards to interest rates, the market and the economy in general and want the stability of knowing what your monthly mortgage payment will be, then a fixed rate mortgage would be more suitable for you. When looking at Fixed-rate mortgages, you need to also consider the introductory period offered, as your payments will only be ‘fixed’ for this period. After this time, you will move onto the lender’s Standard Variable Rate. Shorter introductory periods (2 years) will normally offer a cheaper monthly mortgage payment than longer introductory periods (5 years), but you will need to factor in the ‘true’ cost of the mortgage when you consider any fees applicable at the end of this period when you look to remortgage once again. The shorter fixed period may be cheaper monthly, but over the 5 years collectively you may save more on the longer fixed period. These are all things you should discuss with a mortgage adviser to ensure you get the best deal suited for you, as mortgages are not a ‘one size fits all’.
Once you have found the deal that you want, you need to complete an application form. If you choose to make an application using Zing, we will submit the application on your behalf.
Once submitted, your case will then be passed onto our team of administrators who will oversee the process and make the magic happen. They will progress your application by chasing at least once a week and liaising with all parties to ensure not only does your application gets reviewed and moving as soon as possible, but that everyone is kept fully updated throughout the process.
If you wish to submit an application yourself, then it would be down to you to chase the lender and your solicitor, whilst supplying supporting information and documents when requested.
Your application will be subject to a credit score/credit rating check that is performed by the prospective lender. The lender may also want to visit your property to establish its value and to confirm it is suitable security for them, although ‘Desktop valuations’ where the lender doesn’t need to visit or access the property are on the rise. The type of valuation required varies and is normally dependent on key points such as the property type, the loan to value and the lender’s preferred type of valuation.
People who are re-mortgaging their property will need to have a solicitor or conveyancer in place to handle the move from one lender to another. How the solicitor is instructed is dependent on the mortgage deal selected. If you chose a product that comes with ‘free legals’, the lender will instruct a solicitor from their panel who will carry out the legal requirements. If however, your product doesn’t come with this, you will need to choose and instruct your own solicitor and pay for their services. The solicitor will handle the move from one lender to the other as well as registering the new mortgage (first charge) with Land Registry.
Zing is all about helping you find the right mortgage for you. Our expert team of mortgage brokers in Essex can assist in finding the right mortgage for you. We work all across various locations in Essex; including Southend-on-Sea, Brentwood, Rayleigh and more. It’s so easy to talk to a mortgage broker near you and have them meet with you in the comfort of your home.