29/06/2023

Remortgaging could be a way of saving money as homeowners come to terms with rising interest rates.

Just like other outgoings like gas and electricity or insurance, you can save money by shopping around for a better mortgage deal, which could help ease the financial burden faced by homeowners.

Is now a good time to consider remortgaging?

Yes, now could be a good time to dig out your mortgage offer document and check the terms and conditions, especially if you fall into one of the following categories:

• You are on a standard variable rate (which means you’ll be impacted by interest rate rises),
• You have a tracker mortgage (again, any interest rate rise will directly affect the amount you pay each month), or
• Your fixed rate is due to come to an end in the next month or two.

Remortgaging is very common and is nothing to be nervous about. It’s a good idea to switch your mortgage to make sure you’re on the best deal. In fact, it is advisable to regularly review your mortgage. Staying put often means you miss out on better deals.

You can start shopping around six months before your current rate comes to an end, as many mortgage products are valid for six months from the date of issue.

When comparing deals make sure you factor in all of the costs to decide if remortgaging represents better value for you, for example, remember to check any arrangement or product fees associated with the mortgage you are choosing and any early repayment charges that your existing lender might apply. If in doubt, speak to a mortgage expert.

What is the process for remortgaging?

• Ask your current lender for a closing balance so that you can see the amount that you need to pay off. This is how much you will need to borrow when remortgaging.
• Decide on your new mortgage. You may use an independent mortgage broker to help you with this.
• If you are moving to a new lender, instruct a solicitor to deal with drawing up the mortgage deed and transferring the title of the property. Some mortgage lenders encourage you to use their nominated legal representative, but beware, this person is acting for the mortgage lender, not you. It is advisable to instruct a reputable residential property solicitor who you trust to act in your best interests and provide independent advice.
• A number of documents will then need to be checked, for example, three months of bank statements, utility bills, ID and so on.
• Once your new lender is happy with all of your documentation, they will give you a mortgage in principle, which sets out how much they are prepared to lend you.
• A valuation must take place to confirm that the property is worth the amount you are borrowing and, providing it is, you will receive your mortgage offer.
• Now it’s time for your solicitor to draw down the mortgage funds from the new lender to pay off the old mortgage.
• The final step is for your solicitor to register the mortgage holder’s details with the Land Registry and, where necessary, transfer the title deeds to the new lender.

The whole remortgaging process should take roughly four to eight weeks.

If your new deal has an introductory offer, for example, a discounted rate for two to five years, do remember to review your mortgage again when the introductory period ends, otherwise you are likely to be switched to a standard variable rate, which will almost certainly be higher than other available rates.

If you are considering remortgaging and would like a quote for legal services, please contact our Stoke-on-Trent solicitors on 01782 205000 or our Altrincham solicitors on 0161 929 8446. Alternatively, you can email enquiry@beswicks.com.