The simplest way to understand remortgaging is to think of a mortgage as a product. When you initially took out your mortgage you agreed to a set of terms, rates and values that form the product. Remortgaging a home means swapping your initial mortgage product for a different one with different terms.
Remortgaging can be done by moving to a new mortgage lender, which is the standard practice. However, it is also possible to remortgage with your existing lender, which is known as a product transfer. If you have any further questions, please get in touch with us at Whelehan Solicitor.
Why People Remortgage Their Homes
Remortgaging is an opportunity to release some of the value of your home or to avail of a better mortgage rate. Remortgaging to release money from the value of your home is a borrowing method called equity release.
There are many reasons people remortgage their home for equity release and but there is no exact reason required for approval. The most common reasons for remortgaging are that people want to plan for their later years or make home repairs. Some people also choose to release money this way to pay off loans or for medical costs. Whatever reason you have for choosing to release equity by remortgaging, it shouldn’t affect your remortgage application.
Another method of remortgaging is switching mortgages. Again, there are many reasons that people choose this route, including consolidating debt or reducing mortgage rates. The benefits of switching a mortgage depend on the mortgage product you have and your circumstances. The terms of your existing mortgage will also determine if you can switch and/or if there will be a penalty fee.
If you can switch, then you might be able to avail of benefits such as:
- Interest savings
- A reduced mortgage term
- Lower repayments
Remortgaging is a common practice among homeowners and can be a savvy financial move. It is advisable to consult with a financial advisor and solicitor before committing to the remortgage process.
How To Remortgage
The steps of remortgaging your home will be similar to your original mortgage application. In most instances, if switching, you must have been with your current mortgage lender for a minimum of one year. Check with your lender or solicitor before starting the process.
To begin, you will need to know the current value of your home. Estate agents in your local area will be able to provide a valuation for a small fee. Once their survey is complete, they will supply you with a written valuation which your new lender will require.
There are many mortgage options available to you when remortgaging. Each deal will have slightly different benefits, like cash incentives and lower rates. To help with your decision making, there are free online mortgage calculators and comparison tools available. These will help you navigate the options and make a better-informed decision.
The application process is as with any other mortgage application. You will be required to complete an application form for example. The lender will also ask you to supply evidence of your income and outgoings along with any savings and debt records.
As with your first mortgage, there are legal processes that must be followed when remortgaging. For this, you will need to engage a solicitor familiar with mortgage applications and property law.
The process of remortgaging is often swifter than that of a first or mortgage. Simply because there is no property chain involved and you will be more experienced this time around. All going well, the remortgaging process can be completed in as little as four weeks
Things To Consider When Remortgaging
Remortgaging is not the best route for all homeowners. If you have an existing tracker mortgage, for example, there is a risk of losing the tracker element when you switch lenders. Similarly, there could be a compensation fee for breaking your fixed-rate mortgage to move. If you find yourself in either situation check that it still makes financial sense to move before applying.
What You Will Need To Remortgage
Contact your solicitor for a comprehensive list as soon as you decide to remortgage. This will save you searching for documents at the last minute and help to move the process along quicker.
Overview of requirements:
- A recent property valuation (note: If you are releasing equity in order to make home improvements, ask the estate agent to also provide a future valuation estimate based on the planned home improvements)
- Invoices of any home improvements carried out
- Evidence of approved planning permission (if needed)
- Six months of bank statements
- Twelve months of loan, debt or savings statements.
- Photo ID
- A solicitor – it doesn’t have to be your original solicitor
- A financial advisor (optional)
- Title deeds – your solicitor will request these from your existing mortgage provider
- A letter of authority to let your solicitor request the deeds
Contact Whelehan Solicitors, Tralee
If you are planning to remortgage your home, contact us at Whelehan Solicitors Tralee or call 066 712 9782 for advice. We provide remortgage and mortgage application services and make the process as stress free as possible for our clients.