THE REMORTGAGE PROCESS
Re-mortgaging, just like a mortgage, can be time consuming to arrange and potentially difficult to understand. We think breaking the process down into 4 small steps should help you understand re-mortgaging better.
Remortgaging may involve getting a better deal from your current lender, or it may mean changing lenders if a rival is offering a more competitive rate. The remortgage usually will involve a fresh survey of the property taking place, and an updated valuation of the property, which will take into account any changes in value due to home improvements, or due to fluctuations in the local or national property market.
Mortgage Penalties
Contact your mortgage lender and inform them that a home re-mortgage is being considered, they may offer a better deal to stay with them. Find out if there are any early redemption penalties, these are sometimes called early repayment charges. How much will you have to pay out in any redemption penalties? Hopefully there will be no redemption penalties, but these will be recouped over time. Calculate how much your current mortgage costs over 1 year, including any penalties.
Locating a New Mortgage
The next step in re-mortgaging is to find a new mortgage, you want smaller monthly repayments and extra flexibility if you require it. There are plenty of companies and web sites online that you can use, but you could be turned away if you have problem credit.
The Grabber has provided a form to help with your re-mortgaging, it is easy to complete and you aren't turned away for having less than perfect credit ratings. You can use the competitive, no obligation quote to compare against your existing lender to see if it could save you money. Calculate how much the new mortgage costs over a 1 year period.
Remortgage Fees
Ask the new mortgage lenders if any legal, valuation or registration fees are involved in the new mortgage. Any costs involved will be recouped over time but some companies may even waive the fees as part of their marketing gimmicks. Add these fees to the new mortgage costs over the 1 year period.
Savings versus Fees
Compare the cost of your current mortgage including any fees involved, against the cost of the new mortgage including any fees. Ideally the re mortgage should save you money straight away over the 1 year period. With costs involved it may take some time to recoup this initial layout, but annually you should be looking at making a saving. It is possible that you may have to compare differences over a 2 year period before you begin to see savings but the length of time over which you are willing to wait will depend on your personal preference and your circumstances.
On top of redemption fees, most lenders charge a sealing fee and/or a fee for releasing the deeds, which can add up to around another £100.
The total legal costs should be much lower than when you bought the property, as there are no contracts to prepare and there is no stamp duty to pay. However, you should still budget to spend £300-£500, unless your new deal comes with the legal costs paid by the mortgage company.
Re-mortgaging
Re mortgaging, should save you money perhaps not straight away, but within a short span of time. A re-mortgage on the home is a large investment, so you should make sure to be certain before accepting and signing any paperwork on the mortgage. Once the paperwork or contracts have been signed they become legally binding.
