With the significant increase in house prices over the past few years, many home owners today would like to release some of the equity in their home by remortgaging. But where do you start?
The first step is to contact us and we can advise you on the best remortgaging options.
We will work with you to check the terms and conditions of your existing mortgage. These will tell if you are tied-in to your mortgage deal or if there are any early repayment charges. You can then decide if it is worth switching to a different rate or stay put until the penalties have expired.
We will then talk you through the three types of deal on offer and which will suit you best. These are:
- Fixed rate schemes – ideal for people who want certainty and must be able to regulate how much they will be spending each month.
- Discounted loans – offer a reduction off the standard variable rate for a set period. If rates fall, the rate you will pay will go down but if rates rise, so do your payments.
- Offset mortgages – mortgages which allow a borrower to keep balances (such as mortgage debt, savings account and current account) in separate accounts but, for the purposes of interest calculation, all balances are aggregated. This means that you will have the option to either reduce the term of your mortgage or reduce your monthly payment.
We will of course guide you through the whole remortgaging process, but for your information this is what will happen:
- An ‘early repayment statement’ will be obtained from your existing lender telling you how much you owe.
- An application form from your new lender will need to be completed, along with details of your income and proof of your identity. Generally, income verification is required, such as payslips and P60 if you are employed or audited accounts, an accountant’s reference or Inland Revenue produced tax assessments if you are self-employed. Some lenders may also require bank statements and a mortgage statement from your current lender. In some situations, a completed mortgage application and proof of identity are the only requirements.
- Your new lender values your home.
- Subject to all the paperwork being satisfactory, the lender will issue a mortgage offer which will contain the amount of the mortgage and the terms that they will offer you.
- Solicitors will need to be instructed at this point to arrange the legal documentation, leading through to completion of the loan.
The whole process should take about a month to complete.
Once you have received a completion statement from your solicitor or new lender, the process has finished, and your new mortgage is in place.