If you have had your mortgage for over five years, you may be considering remortgaging in order to save money. This blog takes a look at the stages of remortgaging, and what you may need to consider.

Step 1: Understanding what remortgaging is

In this post I am looking at replacing an existing mortgage facility with a new facility, to take advantage of any “special offers” in the market place, particularly if your current mortgage is uncompetitive, or for other reasons.

Step 2: What you are looking for?

People consider remortgaging in order to get a better deal. For example, at the end of a fixed rate deal the lender generally applies their standard variable rate (which will, probably, be a higher rate of interest than your previous, fixed, rate).

If you are looking to rent out a property you own, which is already mortgaged, you may look to remortgage with a specialist buy to let lender.  Some high street lenders can have different criteria for buy to let mortgages compared to residential (i.e. owner occupier) mortgages and it may be worthwhile changing lender.

Remortgaging can be an effective way of raising capital for home improvement or extension and it can make considerable sense to extend your current home compared to moving house.

If you are unsure whether remortgaging is the right thing for you, it can be worth speaking to your solicitor or an independent mortgage advisor.

Step 3: Look around at the deals on offer

Once you have decided you want to proceed, take time to research what is on offer. Do not leave this to the last minute – try to give yourself some months to go through the process. This is particularly appropriate where there are conditions attached to your original mortgage regarding early repayment – usually in the form of heavy financial charges. Better to let any period in which early repayment charges will apply expire before taking out a “new” mortgage.

Step 4: Mortgage application

Applying for a new mortgage will be very much like applying for the original loan, so you will need to be able to provide anti money laundering identification, evidence of income and so on. In addition you will need to know, accurately, what is required, in money, to redeem the existing mortgage. Your solicitor should be alerted to your intention so they can prepare the initial steps with you.

Then, having established in principle which lender to approach, you will need to complete the mortgage application.

Step 5: Property evaluation and completion

The new lender will carry out credit checks, and will request a valuation report for your property. If all is in order you will be given an offer of loan and your solicitor will deal with the legal work in discharging your old mortgage and securing the new loan over your heritable property. Most main lenders will, to save expense, instruct your solicitor to deal with the legal work, accepting the documentation prepared by them.

Be aware, however, that some of the smaller lenders insist on their solicitor being involved and this can add, substantially, to the cost for you.

Working on your behalf and on behalf of the lender, your solicitor will ensure that the process will run smoothly.