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What is Remortgaging & How Does it Work?

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Remortgaging is the act of switching your mortgage to a new lender, this can be done by you direct or via a mortgage broker.

When it’s your remortgaging time, it’s always best to consider any changes that you would like to make to your mortgage such as: 

When remortgaging, it’s always a good idea to speak with an independent mortgage broker, like us, who will understand your needs and shop around for the most cost-effective mortgage for you.

Is Remortgaging a Good Idea? 

Yes, here are 6 facts about how remortgaging works to help you decide if it’s a good idea or not: 

  1. Switching lenders when remortgaging will take 2-3 months so allow plenty of time for the process. 
  1. You’ll be able to search the market via a mortgage broker to get the best interest-rate.  
  1. Features of your new mortgage, such as flexibility, portability, overpayments, etc will be considered by our team.  
  1. You’ll need to provide documents such as 3 months proof of earnings, ID, and bank statements when remortgaging.  
  1. There are some fees payable, such as legal fees, valuation etc, usually no more than £500.  These will be factored in the overall cost of remortgaging for easy comparison.  
  1. You’ll have the option to change your term or borrow additional money as part of the remortgaging process.  

Alternatives to Remortgaging  

There are various alternatives to consider before remortgaging, these are: 

Product Transfer Mortgage

You can stay with your existing lender if they offer you a new deal through product transfer mortgage.

It’s quick, however, it’s likely that you won’t be able to make any changes.  Also, products transfers are only deals that your existing lender have available, remortgaging will allow you to compare the market to get the best deal.

Further Advance Mortgage

If you are in the middle of a fixed-rate deal and would like to raise additional money for any reason, you are able to apply for a further advance mortgage from your existing lender.

This will be a full application process and you’ll have to meet current lending criteria. A further advance takes roughly the same time as remortgaging; however, you’ll possibly avoid paying any early redemption charges if applicable.

Secured Loans

These are like a further advance mortgage; however, the new secured loan is with a different lender.  These are often called homeowner loans or second charge mortgages.

You’ll have your existing mortgage and then a new secured loan mortgage with a different lender. These can work well if you’ve been declined when remortgaging or for a further advance and you’re looking for additional funds.

Have a Question?

Feel free to send us your remortgage question via the button below. A member of our team will be in touch right away!

Things to Consider when Remortgaging 

When remortgaging, if you are not looking to borrow additional money, here are the two main things to consider: 

Mortgage Term

If you can afford to pay a bit more on your mortgage per month, you may be able to reduce your term and save yourself a lot of money in interest.  You can also look at increasing your term when remortgaging if your circumstances have changed and you’re looking to reduce your monthly commitments.  

Life Insurance

If you’ve had your mortgage for several years now, when remortgaging, it’s always a good idea to review your life insurance, critical illness, or income protection policies to see if these are still suitable.

Circumstances such as a change in employment status, a change in the number of children, mortgage or debt amount etc should all be accounted for within your family protection needs.  

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About the Author

Malcolm Davidson

Managing Director of UK Moneyman LTD

Malcolm is one of the UK’s most well-known and respected Mortgage Advisors. He is passionate about providing a 5* customer experience and he has also trained and mentored dozens of fellow Advisors in a career that is now in its third decade.

In addition to his day to day duties as Managing Director, Malcolm still gives out mortgage advice and feels lucky that his job is also very much his hobby.

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