The topic of remortgaging has been on the tip of peoples’ tongue recently, with the likes of The Guardian asking people to share their experiences in the current economic climate. The Office for National Statistics (ONS) predict that more than 1.4 million people will remortgage during 2023 and some experts are raising concerns about the rush to do this. The Financial Times states that UK banks fear the predicted rush to remortgage with lenders raising rates further. But what does remortgaging actually involve? Here’s what you need to know.
What is a remortgage?
Put simply, a remortgage involves applying for a new mortgage with a new lender, while staying in your current home. If you have a buy to let, you can still remortgage if you need to. Search for the best rates available and consider speaking to your estate agent if you need help.
Generally, you can start the process of remortgaging up to six months before your current deal ends. Just be sure to have any paperwork lined up ready to go.
When would I consider remortgaging?
Remortgaging is a completely personal choice and should be given plenty of consideration. Perhaps you’re experiencing a big change in your life or your current mortgage deal is about to end.
It might be that your property is worth more than when you bought it, making you eligible for a broader set of deals. Often landlords don’t want to go onto the lender’s higher rate (SVR), prompting them to look for better options with lower interest rates than previously. You can use this opportunity to change your interest rate for the better.
Other things to be aware of when remortgaging
Some people choose to remortgage their home to help raise funds for a costly purchase or project. But while it may allow you to raise funds, you need to be clued up on whether you can afford the additional amount over the full mortgage term. It may be worth seeking independent financial advice before coming to a final decision, because if you can’t make the payments, you could risk losing your home.
Your new lender will check your credit score and you should ensure all the details in your application are up to date. On top of this, you will need to factor in additional costs, such as application fees, valuation fees and solicitor’s fees. You will also have to pay exit fees if you are leaving your current mortgage early. It’s worth checking with your new lender whether there are exit fees or early repayment fees, should you want to remortgage again later down the line.
Have you been through the process of remortgaging recently? Feel free to share your experiences down below.
Helpful links – https://www.barclays.co.uk/mortgages/remortgage/remortgage-process/
