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Maybe you want to shorten the term of your mortgage, pay off outstanding debts or reduce the amount you’re paying. In any of these cases, you’ll probably need to remortgage your home.

Remortgaging is where you move your loan from your current lender to another one. Perhaps you can find a cheaper deal, meaning that you keep more money in your pocket each month, or repay the same amount but pay the whole loan off faster. Maybe you actually want to extend the length of your loan agreement, so you can pay back slightly less each month (even though it takes longer to pay off overall).

Thousands of people re-mortgage their home each year, but while the process itself is relatively straightforward, determining whether it’s the best financial decision can be a challenge. Inexperienced homeowners might be wise to speak to an independent financial advisor (IFA) before making a commitment.

For example, remortgaging may be a good idea if:

  • Your current deal is about to end, and your lender is going to put you on a standard variable rate (SVR).
  • The value of your home has significantly increased since you took out your mortgage, meaning you’re now in a lower ‘loan-to-value’ band and can benefit from lower rates.
  • The Bank of England base rate is set to go up, which may affect your current mortgage payments.
  • Your current lender won’t let you pay extra towards your mortgage, even though you can afford it (or is going to charge you extra to do so).
  • You want to use the equity in your home to pay for another investment.

However, sticking to your current plan may be preferable if:

  • You only have a very small amount left to repay (for example, £50,000 or less), as switching costs are likely to eliminate any saving you would make.
  • Conversely, if you have very little equity in your home, you may struggle to find a better deal that offers you more than 90% of your property’s value (although 95% mortgages do exist).
  • The value of your home has dropped, and you may be facing negative equity if you apply for a new loan.
  • Your employment status has changed, and you are now self-employed or your partner no longer works.
  • There is a substantial charge if you exit your current agreement early.
  • Since signing up for your last mortgage you have suffered credit problems or failed to pay debts.

Top tips before deciding to remortgage:

Shop around

You may want to use a comparison site to look for the best available deals, but it’s not always easy to determine which deal offers you the best rates for your particular circumstances. If you would like some professional assistance we can recommend reliable mortgage brokers who can make your transaction as smooth as possible, and often negotiate a special rate to help you save money in the long run.

Remember the affordability checks

Just like applying for a new mortgage, your finances will be scrutinised to make sure that you can comfortably pay your mortgage. Your bank statements and credit rating will be combed through, so in the months leading up to your re-mortgage application you might want to become a bit more frugal, and avoid missing any repayments on existing contracts (like phones, rentals etc.)

Speak to your current lender

Once you’ve seen your options, present them to your current lender to see if they can offer you a better deal. Maybe they can offer you a better fixed-rate, or provide more flexible features (like free overpayments or payment holidays) that make your plan more suited to your needs.

If you make the decision to re-mortgage your home, you’ll need an experienced conveyancer to help you complete the process. At Daily Move, our goal is always to ensure our clients have the most seamless experience possible.

We have assisted hundreds of clients with their legal documentation for remortgaging, and will make sure that all the required information from your lenders (existing and new) is in place for a secure transfer. We can conduct any searches that your lender requires, and make sure that your new agreement complies with the leasehold of your property, should you have one.

For more information about any of our conveyancing services, please contact us today. You can get a free, no-obligation quote using our online form, or call us directly on 0845 862 2275.