What is remortgaging
There is a common misconception around remortgaging that it involves either moving home or taking out a second, separate, mortgage on a property. The issue is complicated further by those who use the term 'remortgage' when simply switching between products from the same mortgage provider, which is also an inaccurate definition.
In reality, remortgaging a property is the act of switching mortgage providers and paying off the original mortgage with the proceeds of the new loan, using the property as security. Put simply, remortgaging can in fact be better described as switching between two lenders – a serious legal process that often accounts for large sums of money.
What are the benefits of remortgaging a property?
Most people who choose to remortgage their property do so to reduce the interest rate that they are paying on the current mortgage, thus making regular savings. Most mortgages come with an introductory rate that can usually last anywhere between one and five years, with the interest reverting to a company standard amount after that period is over. If you want to continue to pay a better, lower, interest rate regularly, then switching providers and remortgaging could be the answer.
What are the downsides of remortgaging a property?
If you are near the end of your mortgage payments then it is less likely that you will enjoy the same level of financial benefit. This is because the money saved through a lower mortgage rate is countered by the additional cost of a legal survey and other associated switching costs and penalties – typically an exit fee and early repayment charge.
How should you proceed with a remortgage?
If you think that there is money to be saved by remortgaging your property then there are plenty of ways to check rates both online and on the high street. If you are unsure about the process and require extra advice and guidance then you should consult a specialist legal services provider.
Once you have made the decision to remortgage, you will need to instruct a solicitor to liaise with the lender. This requires the legal expert and lender to communicate regarding the mortgage conditions and confirm that the security provided by your home is suitable for the new mortgage.
In addition to this, solicitors are required to attend the redemption of the existing mortgage and the registration of the new mortgage with the Land Registry – an essential legal step to complete the process.
Compare solicitors now to get the help you need to remortgage a house.