What is remortgaging and how does it work?
Remortgaging is when a homeowner replaces their existing mortgage with a new one on the same property.
There are lots of reasons why you might do this. For example getting a better interest rate, changing the terms of your loan, or accessing the equity that’s built up in your home.
There are a couple of steps to remortgaging:
- Research and compare the different mortgage deals offered by lenders to find the one that suits you best. You can also chat with an independent ‘whole of market’ broken to help with this!
- Once you’ve picked the lender and mortgage product that’s right for you, you’ll need to apply for the new mortgage. This means you’ll go through similar steps as when you got your first mortgage. So, you’ll need to provide financial information and do a credit check.
So what happens next?
Once your application has been approved, the new mortgage pays off your existing one. Then you’ll start making monthly payments according to the terms of your new mortgage agreement.
When deciding whether remortgaging will be worth it for you, you’ll want to consider all the fees and costs that come with getting a new mortgage. These could be arrangement fees, valuation fees and any early repayment charges or exit fees that your current lender might charge.
Whether remortgaging is right for you will depend on your current mortgage terms, your situation, your goals, and the deals available on the market.
It’s always a great idea to speak to an expert (like a money coach, financial adviser or mortgage specialist) about your options so you can be sure you’re making the right choice for you.