Buying your first home is a process that takes more resources. Most people in the UK prefer to buy their first homes on a mortgage. However, sometimes your mortgage rate may be coming to an end, and you want to look for a new lender to continue financing your home. Looking to remortgage your home, but don’t know where to start? Now we inform you what is remortgaging and how does it work?
In this case, you may opt for a remortgage. Remortgaging is where you move your mortgage on an existing property from one existing lender to another. The new mortgage you obtain replaces the existing mortgage.
You are likely to opt for a remortgaging when
- You need a fair deal than what your current mortgage lender is offering
- Your current mortgage is almost coming to an end
- You want to borrow more money on your property
Steps to follow when remortgaging
Step #1 – Research the market
The most important thing to do when remortgaging is to research widely. You want to find the best mortgage lender available for a fair deal. In this case, you can ask your current mortgage lender if they have a better offer before you turn your head to another lender.
The mortgage market is wide, and you can always be confident of getting a fair deal for your property. Most lenders will advise you on the right time you should consider remortgaging.
Step #2 – Consider the costs
The next step involves considering the financial costs of moving your mortgage to another lender. Find out if remortgaging your property is financially worth it. For instance, you can calculate the new mortgage repayments and compare them with your current rates to establish the cost and benefits of making such moves.
Some costs you want to consider include property valuation, conveyancing, completion fees, and ERC charged by your current mortgage provider.
Step #3 – Get done with the legal work
Remortgaging involves some legal work that you have to pass through. You have to consult a licensed conveyancing solicitor in London like AVRillo to help you with the legal process of remortgaging, or your mortgage lender can appoint one on your behalf.
A licensed property solicitor will help you in the transfer of funds. They will also check if the new mortgage is enough to pay your existing lender. The conveyancing solicitor will send you the legal documents to read and accept.
Step #4 – Ask for Agreement in Principle
An Agreement, in Principle, will give you an idea of how much you can borrow, given your current status. Remember getting an Agreement in Principle is not a guarantee that a lender will accept your mortgage application. The application involves a check on your credit score and credit history.
Step #5 – Apply for the remortgage
Once satisfied with the application in principle, you should apply for the remortgage. You can do this online on your phone. You have to confirm your income and some supporting documents when making an application.
Some lenders will ask for home insurance coverage and paperwork for the current mortgage cover.
There is a lot of legal work involved when remortgaging. Therefore, you should hire a conveyancing solicitor to guide you through the process to avoid making costly mistakes. Read More,