Understanding Remortgaging: What Happens When You Remortgage
Remortgaging is a process of switching your existing mortgage to a new one, either with your current lender or a new lender. This often happens when your initial mortgage deal comes to an end or when you want to borrow additional funds. As a London estate agent, we have helped many of our clients navigate the remortgage process, and in this post, we will explain what happens when you remortgage and what you need to keep in mind.
1. Reasons to Remortgage
Remortgaging can be done for various reasons, including:
- To save money on monthly repayments by switching to a lower interest rate.
- To borrow additional funds for home improvements or other expenses.
- To fix your interest rate for a longer term to protect against potential interest rate rises.
- To shorten or extend the term of your mortgage.
2. The Remortgage Process
The remortgage process is similar to the initial mortgage process. Here are the steps involved:
- Shop around for a new mortgage deal.
- Submit an application to the lender.
- The lender will carry out a credit check and valuation of your property.
- If approved, you will receive a mortgage offer.
- You will need to appoint a solicitor to handle the legal work.
- The solicitor will carry out searches and review the new mortgage offer.
- If everything is satisfactory, you will sign the new mortgage deed.
- The solicitor will then arrange for the old mortgage to be redeemed and the new mortgage to be registered.
3. Costs Involved
Remortgaging can incur various costs, including:
- Early repayment charges if you are ending your current mortgage deal early.
- Arrangement fees for the new mortgage.
- Valuation fees.
- Solicitor fees for handling the legal work.
However, despite these costs, remortgaging can often lead to long-term savings or access to extra funds.
4. Potential Risks
When remortgaging, it is important to be aware of potential risks, including:
- Your property may not be worth as much as you thought, causing your application to be rejected.
- You may not be able to switch to a lower interest rate if your credit score has worsened since you took out your initial mortgage.
- Switching to a new lender may involve additional legal and valuation work, which can be time-consuming and costly.
5. Getting Professional Advice
Remortgaging can be a complex process, and it is always advisable to seek professional advice from a mortgage broker or financial advisor. At Greater London Properties, we work closely with trusted mortgage brokers who can help you navigate the remortgage process and find the best deal for your circumstances.
Conclusion
Remortgaging can offer a range of benefits, from saving money on monthly repayments to accessing additional funds. However, it is important to be aware of the costs and potential risks involved, and to seek professional advice before making any decisions. At Greater London Properties, we are here to help you every step of the way, so please do not hesitate to get in touch if you have any questions.
2023-05-05 14:15:33
