Remortgaging Solicitors

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What is remortgaging?

Remortgaging is when a homeowner transfers their mortgage to a new lender while still living in the same property. It doesn’t necessarily have to mean borrowing more money, though this is one option when remortgaging.

What are the reasons for remortgaging?

There are many reasons why people may choose to remortgage, including the following:

Interest rates: Your fixed term deal with your current lender has ended. Often this means customers are moved onto a lender’s standard variable rate which is normally more expensive. You can obtain better interest rates by shopping around for another fixed term deal with another lender. This is especially true if your property is worth more now than when you bought it, meaning the loan-to-value ratio has changed, and you may be entitled to better interest rates.

Change the mortgage terms: Often people remortgage to either: borrow more money, extend or decrease the borrowing terms, switch to a mortgage which allows them to make bigger overpayments, or change from an interest-only mortgage to an interest and repayment mortgage (though it is tricky to switch the other way).

Equity release: Sometimes people choose to remortgage in order to access some of the equity tied up in their property to pay for big purchases such as significant home improvements, or to pay off other debts.

What is the process of remortgaging?

Most people choose to remortgage when their fixed term mortgage deal with their current lender ends, before they are put onto the expensive variable rate. If you are in this position, the following steps represent a typical remortgage process:

Search for deals: around three months before the end of your current term, start searching for new mortgage deals that suit your requirements on comparison websites or through a mortgage broker. It can also be beneficial to approach your existing lender too to see if they will match any deal that you have found.

Arrangement in Principle: Most lenders will allow you to complete an arrangement in principle which gives an indication as to whether you can borrow the amount you need without a full credit check.

Fees to consider: There will be multiple extra fees to factor into planning for a remortgage. These can include:

An application fee charged by the lender (also known as an arrangement, product or booking fee),
Valuation fee – changed by the lender to confirm the value of your property.
Occasionally there is an exit or early repayment fee.

Apply for the mortgage: You then apply for the new mortgage. Ensure you have the correct documents which prove income, and your personal and financial situation and any other credit commitments.

Instruct a conveyancing solicitor: Enlist the support of a qualified conveyancing solicitor. They will then manage the communication between the lenders, your credit and identity checks, your property valuation, and the secure transfer of funds. They will ensure every stage is carried out efficiently and accurately.

Completion: You can expect completion to take anywhere between two weeks to four months, though an experienced solicitor will streamline this process making it much faster.

What is an arrangement fee in remortgaging?

There are many names for this fee, which essentially mean the same thing: an arrangement fee, product fee, application fee or booking fee. These all refer to the charge mortgage lenders require for arranging the mortgage deal.

Why choose Merriman Solicitors?

Merriman Solicitors will handle the legal side of remortgaging your property. We handle communications between lenders, property searches and surveys ensuring that every step is carried out efficiently and accurately.

Our experienced team of conveyancing solicitors are committed to client care. We understand that the law can appear complex, so we endeavour to guide our clients through legal processes in a considerate manner. Feel free to call us at 01672 515846 or contact us to discuss how we can assist you.

Why choose Merriman Solicitors (Incorporating AB Family Law)?

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Expert property solicitors with vast experience in both buying and selling

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Frequently asked questions about remortgaging

Do I need a solicitor to remortgage?

If you chose to remain with your current mortgage lender and are simply borrowing more or switching products then you are unlikely to need the help of a solicitor. However, when switching to a different mortgage lender, there are legal steps that require expert involvement.

A remortgage conveyancing solicitor can manage the communications between lenders, any checks on the property and the secure transfer of funds. These important steps need to be managed with accuracy and efficiency, and an experienced solicitor can streamline the process reducing the potential for stress and delays.

When can I remortgage?

When your fixed rate term with your current lender ends, or if you are on a variable rate tariff, you can remortgage any time. You can try and remortgage in the middle of a fixed term contract, but will likely pay a large early repayment fee.

Why would you be refused a remortgage?

As when you first applied for your mortgage, you will need to pass credit, identity and affordability checks. If any of your personal or financial circumstances have changed for the worse, you may no longer meet the requirements of some mortgage lenders. In these circumstances it is often better to opt for a product transfer with your existing lender rather than applying for a new one.

Another reason is that if the value of the property has dropped, and you need to borrow more than 95% of the value of your property, you are unlikely to find a preferable interest rate. This is especially true if the value of the mortgage has fallen to a point where you owe more on the property than it is actually worth, i.e. you are in negative equity.

It is also true that If your mortgage debt is too small, for example below £50,000, you are less likely to make a saving on interest if fees to switch lenders are high, and some lenders won’t even take on a mortgage of less than £50,000.

Can you get money from remortgaging?

You can remortgage your home to release equity for a lump sum to put towards home improvements or paying other debts, for example. You’re essentially borrowing more against your property in order to free up cash. This means your mortgage will increase and your monthly payments are likely to go up. This option is best suited to people who have paid off a significant amount of their mortgage or have paid it off completely.

Can you remortgage early?

If you have not reached the end of your fixed term contract with your current lender, then you may be able to switch to a new lender, but are likely to incur an early repayment charge which can often amount to thousands of pounds. It is worth weighing up the benefit of a lower interest rate and the cost of this before proceeding with an early remortgage.

Can I remortgage without a valuation?

You generally need a valuation to remortgage your property for the lender to determine your loan to value ratio. The more your house is worth relative to the loan value, the lower the interest rates available. This will usually be a ‘desktop valuation’ based on comparable sales data, but there are some exceptions where a lender may send a surveyor to your property if it is unusual, or there isn’t much up to date information about your area.