SO you’re looking at remortgaging your property, possibly for the first time, and you don’t know where to start?
Let’s break the process down:
Step 1 – Finding out what you can afford
When assessing how much you can afford, it’s important to know all your annual incomings such as, salary, commissions and car allowances. It’s also key to know if you have any pre or post tax deductions like; share save schemes, season tickets or student loans.
Once we know an estimation of how much you could lend, we always suggest you check your credit file. This may have done with the original purchase, but it’s good practice to make sure that all your payments are up to date and you know what a potential new lender would see on your credit file.
Step 2 – Researching your next mortgage!
Make sure you give yourself plenty of time to research your new mortgage and so that you can find the right deal. Most lenders will allow you to apply and secure a new mortgage for between 3 to 6 months. Which means that your new mortgage will take place the day your existing one finishes.
Together, we will understand what your existing lender is offering you to stay as a customer of theirs, as well as research into the rest of the market to find what other competitive rates are available.
Sometimes it may work out more cost effective to stick with your existing lender and select a new rate. Most of which can be dealt with online and some lenders, allow you to switch your rate early to give you the opportunity to save money right away!
This is known as a Product Transfer.
Step 3 – Deciding the right deal for you.
This is one of the most important steps. It’s key tat you understand what deal is best suited to you. You need to ensure you know what it means if the rate Is changing.
But remember, its not always about the interest rate when finding a good deal, you may need to consider any fees involved such as product transfers, valuations fees etc.
Lenders may offer a number of remortgage incentives that can offset some of these costs so take the time and speak to your lender in detail about any and all options.
Step 4 – Applying for your mortgage
Once you’ve chosen the best deal for you, it’s time to put in your application. Similar to purchasing your property, the lender will request a number of details from yourselves.
At this stage the lender will also request a survey to be carried out on the property. More and more lenders are adopting a digital process when remortgaging, so the valuation survey may in fact be carried out automatically, or via a desktop survey, providing that there is sufficient property data available.
Step 5 – Application Assessment
The lender will assess your income, commitments and outgoings to make sure that the mortgage you take out is affordable.
It’s not uncommon at this stage for a lender to request additional documentation from you.
Step 6 -Your Offer and Completion
After carrying out all of their checks, the lender will then provide you with a mortgage offer. Your conveyancer will undertake all of the necessary legal work and take the process through to completion by arranging for the funds to be transferred to your previous lender. If you are borrowing additional money, to consolidate other debt or carry out some home improvements for example, the extra will be paid to you.
We’ve created a series of remortgage videos to break down every step and MORE! If you have any questions, as always drop us a message, call us on 01925 573 328 or email us at [email protected]
