Remortgage

A remortgage is when you already have a mortgage and your existing deal is coming to an end, so you need to move your mortgage onto another product to avoid going on to your lender's Standard Variable Rate.

If you stay with your existing lender, this is known as a rate switch or product transfer. You will only be offered deals by your lender and not the wider market.

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It is normally prudent to see how the deals that your existing lender has to offer stack up against the wider market.

V Finances can assess all the options that are available to you and make a recommendation accordingly.

A remortgage application will feel similar in many ways to when you initially bought your home. We will need to know details of your income, employment, outgoings and personal circumstances and will discuss your mortgage preferences in order to make a recommendation to you.

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Once we have discussed your circumstances and needs, we will ask you to provide the documentation required in order for us to submit your application to the new mortgage lender.

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With a remortgage, as you are changing which lender has the first legal charge on your property, a solicitor is needed. The solicitor will ensure that your current lender is paid off by your new lender and that the legal charge is properly updated with the Land Registry.

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Unlike a purchase, there is no need for searches to be performed or enquiries to be made (as you already own the property), so the amount of legal work required is a lot less and therefore a lot cheaper than with a purchase.

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The average time taken from start to finish with a remortgage is 2 months but we would recommend that you actually start the process much earlier, 6-7 months before your existing rate is due to expire​.

As an adviser, we will advise in your best interests, which means we will always recommend you take out the shortest-term mortgage possible given your current affordability & personal situation. This keeps the amount of mortgage interest you pay over the whole term to a minimum.

Each month over the agreed term, the period over which you agree to repay your mortgage loan, you will pay an amount of the  original mortgage loan back plus interest. This is called a capital and interest repayment loan.
 

You can decide to take out a longer term if you wish. This means, overall, that you will be paying more interest, but by taking out a longer term will reduce the monthly payments to a figure you feel more comfortable with.

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For an idea of what your monthly payments might look like, please feel free to try out the mortgage calculator below.

The first thing to do is to be aware of your credit rating and what impacts it. We would recommend obtaining a copy of your credit report and making sure that you recognise any credit commitments that have been taken out in your name. Having a copy of your credit report can also help you to make sure that there are no errors on there e.g. credit commitment showing as having missed payments if you have actually made them on time. If anything is wrong on your credit report, then you need to contact the company involved and ask them to correct it. You can also add what's known as 'a notice of correction' if there is something on your report that you disagree with.

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Make sure you are always on time with your credit commitments and bills. Missed or late payments may have a big impact on your ability to secure a mortgage.

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You should make sure that your employer as well as any bank accounts, credit cards, personal loans etc all have your most recent address. If you don't update these institutions with your current address, then your data may not pull through correctly and this can impact your credit score.

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Register for the Electoral Roll (if you haven't already) as this can boost your credit score as it verifies your address as well as your identity.

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If you have any credit cards/store cards, try not to be too near to your credit limit. Being near your credit limit may suggest to a mortgage lender that you struggle to manage your money. If you can, pay off your credit cards in full every month.

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Try not to take out any new credit cards, personal loans, car finance etc in the 3-6 months before you intend to apply for a mortgage. Whenever you apply for credit, it reduces your credit score.

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Don't live in your overdraft. If you spend more than half the month in your overdraft, this may indicate to a lender that you are not good at managing your money, so why should they trust you with theirs?

If you have made home improvements or house prices have risen due to market factors, we need to determine which Loan to Value (LTV) bracket you are in. Your LTV is determined by your mortgage balance divided by the current value of your home (not the price you paid for it). Generally speaking, the lower your LTV, the lower your interest rate will be when it comes to remortgaging.

When remortgaging a property, solicitors are required to carry out the legal work involved. The only exception to this is if you are switching mortgage rates with your existing lender or borrowing more money from your existing lender (in which case solicitors are not normally required). We need to know who you are using for the legal work as this goes onto your full mortgage application.

You can either source your own solicitors or we can provide a quote for you.

When you select your own solicitors, we cannot provide any support as no communication or updates will be provided to us.​​​

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When we have provided you with a quote for conveyancing through our selected providers and you have accepted this, we can liaise with the Conveyancer should you need our assistance.

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You may also have the option of using free conveyancing provided by the lender. We have no control over this and do not get updates as to the progress or when completion will take place. Please be aware this service can be slow and poor communication may be expected.

As long as you meet the lender's eligibility and affordability criteria, then you should be able to release some of the equity that you have built up in your home so that you can use it for things such as home improvements or a new car. This means that you increase the overall mortgage balance compared to before and the mortgage lender will send the money that you release from the equity you have built up to your chosen bank account.

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There are alternative finance options to increasing your mortgage, such as a personal loan or a second charge (secured loan), so you should consider your options carefully before committing to a higher mortgage balance.

Consolidating debt is not something that should be taken lightly as you are moving your debt from an unsecured to a secured basis. This means that your home may be repossessed if you don't keep up repayments on your mortgage or any loan secured against it.

Although it may be appealing to drastically reduce your overall monthly outgoings, by consolidating your debt, you are actually going to pay back more in total as the debt will be spread out over a much longer term.

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Lenders will allow debt consolidation (often capped at 80% loan to value) and you need to pass their affordability and eligibility criteria.

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At V Finances, we treat each debt you wish to consolidate separately to ensure that consolidating each individual debt is a good outcome for you. For example, consolidating a 0% interest credit card is not likely to be something we would recommend.

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We need a thorough understanding of how each debt has mounted up and for each debt that is being consolidated, we will need additional paperwork (whether that's credit card statements, redemption statements for personal loans/car finance etc).

If you took out a Help to Buy equity loan when purchasing your property, you should have been told that you can either partially or fully repay the loan during the loan term. As the loan is only interest-free for the first 5 years, if you do not repay the loan within these 5 years, then you will start to pay interest on it. These interest payments do not reduce the amount you need to pay back.

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When remortgaging to pay off your Help to Buy loan, the amount you need to pay back is based on the value of your property at the time you want to pay it off. So if your home is worth more than what you paid for it, then the amount you pay back will be proportionately higher and vice versa if house prices have gone down.

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When paying off the Help to Buy equity loan, you need to get a valuation of your home carried out by a Royal Institute of Chartered Surveyors' qualified surveyor. The surveyor will visit your property and look for properties of a comparable size that have sold within the last 6 months and within 1/4-1/2 mile (normally) of your home to determine the value. The value that they provide is then used to determine how much the equity loan is that you need to pay back.

The cost of this survey is normally in the £300-£500 region. The valuation lasts for 3 months, so it is important to get the timing of it right taking into consideration when your existing mortgage rate is due to expire. You need to send a copy of the survey to the Help to Buy scheme administrators, along with a £200 admin fee.

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The ability to increase your mortgage to repay the Help to Buy equity loan will be based on lenders' eligibility and affordability criteria.

Absolutely. If you haven't used up your current annual overpayment allowance, this may be one option. If you have used up your annual overpayment allowance or you wish to make a larger contribution to the mortgage balance, then you can send the funds to your solicitor who will then make sure that these get paid to your existing lender at completion, whilst avoiding any Early Repayment Charges or having to go onto your lender's Standard Variable Rate.

Every time your mortgage is up for renewal, we will ask you for your most up-to-date information and figures and then work out whether we can shorten your mortgage term as this will reduce the total amount of interest payable to the lender. As we like to tie your mortgage term to your budget, any additional income you are happy to put towards your mortgage budget will help.

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If since taking out your mortgage, you have lost your job, reduced your hours, taken a pay cut or increased your outgoings (childcare, car payments you didn't have before etc) or if your employment status is not acceptable to a lender, we will talk through your options with you, including extending your term. If it's not feasible for you to remortgage elsewhere, then we will talk to you about switching rate to a new product with your existing lender.

We would normally recommend looking into your mortgage options around 6-7 months before your current rate is going to expire. This is because a mortgage offer is typically valid for 6 months. So by securing a new deal early, we can lock in a rate for you and that is safe regardless of whether rates increase after that point. If rates go down, then we will advise you of your options and look to secure the lower rate for you.

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If life admin is not your forte, then why not use our Mortgage Reminder Service and we will contact you when it's time to start reviewing your mortgage.

We have over a quarter of a century of experience in giving tailored advice specific to your circumstances. We can search the whole of the market to find the mortgage that best suits your needs.

We have established relationships with lenders and will check your eligibility and affordability against their criteria before placing your application.

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We will look after all of the process from start to finish, submit your documents to the mortgage lender and keep you updated every step of the way.

We are regulated and authorised by the Financial Conduct Authority, so you get the same protection as if you were going direct to your bank or building society but with the added bonus that we search for the best deal across the wider market.