You may have heard that some homeowners are putting off remortgaging their homes. But why? Is it really as bad as people say? Is applying for a mortgage that terrible?
In this article, we will dispel the five most common myths about remortgaging. After reading, you will see that most people can benefit from remortgaging and there are many reasons to do so!
But first let’s briefly explain the process of remortgaging
Remortgaging is the action of changing your mortgage lender but without moving home.
So, if you originally took out a mortgage with Natwest and now you want to switch to Halifax, that’s remortgaging.
You would first apply for a new mortgage with Halifax. When that application has been approved, your solicitor will use the Halifax mortgage money to pay off the balance with Natwest.
But not everyone is so keen to remortgage their home.
Here are our top five reasons
It’s too much hassle
It may be true that remortgaging can be a bit of a hassle. But it’s really not as bad as people say! In most cases, it only takes a few weeks to complete the process. If you use a mortgage broker then they will do the initial research into the best deals, help with the paperwork and then monitor your application, answering any queries along the way.
Your broker can also compare remortgaging to switching deals with your current lender. This is known as a product transfer and usually only requires one or two forms. Simples!
What is a product transfer mortgage?
Mortgage product transfer vs remortgaging
What documents do I need to remortgage?
I need to wait until my current deal finishes
No you don’t!
You can research and apply for a new mortgage before your current deal ends. In fact, this is the best way to do it. We recommend starting this process around 3 months before. Even if the new loan is approved early your broker will not arrange for this to start until you are out of any early repayment charge period.
I don’t have the time
This is one of the most common excuses we hear. But remortgaging really doesn’t take that much time!
As we mentioned before, if you use an independent mortgage broker then they will do most of the work for you. All you need to do is provide them with some initial information about your income, outgoings and mortgage and they will do the rest.
Most of the process can be completed online and over the phone. You really don’t need to spend a lot of time on it.
CONTACT A REMORTGAGE EXPERT
If you wish to investigate your re-mortgage options we can put you in touch with a fully qualified whole of market mortgage broker.
There will be lots of fees
Again, this is something that puts a lot of people off.
The main fee you need to be aware of is the early repayment charge (ERC). This is a fee that some lenders charge if you repay your mortgage before the end of your agreed product term. However, as we mentioned before, you can start the process of remortgaging 3 months before your current deal ends. This means that you shouldn’t have to pay any ERCs.
There will be some kind of fee for the interest rate product you choose but many lenders offer free valuations and legal services for remortgage customers. Your broker will be able to analyse the costs of moving to ensure it is worthwhile.
Do you need a solicitor to remortgage?
It won’t be worth it
This may be true for some borrowers. It rather depends what deal you are on now and what’s available to replace it.
People re-mortgage for different reasons, it’s not always just about the interest rate.
It is certainly better to make a decision once you have all of the facts. So you can ask your mortgage broker to research some alternative deals and then compare. It may be possible for you to remortgage so that you can pay off other debts, and reduce your overall monthly outgoings.
Don’t forget that if you are coming to the end of an interest rate product, and you do nothing, you will revert to the lender’s standard variable rate. This rate will not be competitive so it’s always sensible to check whether something more suitable is available.
Remortgaging your home can be a great way to save money on your monthly payments, get a lower interest rate, or release some of the equity you have built up in your property. However, many homeowners are put off by the myths about remortgaging and how difficult it is.
In this article, we looked at five of the most common myths about remortgaging. If you are considering remortgaging your home, please contact us so we can put you in touch with a remortgage expert.
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