Remortgaging your home - how to do it and why it could be a good idea

Do the sums add up for remortgaging?Do the sums add up for remortgaging?
Do the sums add up for remortgaging?

Remortgaging is the process of changing your initial mortgage supplier and swapping to another mortgage product from a different provider, and there are many benefits for doing so.

However, remortgaging can be a complicated and daunting business, and there are certain things homeowners need to know in order to make the entire process less stressful.

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Experts at Good Move have compiled their top tips to help ease these concerns.

When is it a good idea to remortgage?

Remortgaging is usually done to save money on monthly payments as you can compare the different options available to you.

If your current fixed-term rate might be about to end, and you don’t want to pay a variable rate, then it could be a good time to remortgage. Perhaps you have come across a better rate on the market you’d like to access or instead you want to overpay your mortgage and your current provider won’t let you do this without a bunch of fees.

Another reason might be in order to release equity from your home, allowing you to access some extra cash while still continuing to live there.

If you are considering remortgaging to consolidate debt, be careful and speak to a debt organisation like the Citizens Advice Bureau to make sure you’re not putting yourself at risk.

How do I remortgage?

1 Get Advice

Don’t be afraid to get advice from a qualified financial expert. Doing so not only means that you’ll get the very best options but if your mortgage or advice turns out to be unsuitable or something goes wrong for some reason, you can complain to the FOS (Financial Ombudsman Service).

2 Check your credit score

When remortgaging your home, you’ll go through pretty much the same application process you had to pass for your current home including all the credit checks. To avoid any disappointment it might be worth checking your credit score before reapplying – which you can do for free through sites like Clearscore and Experian.

3 Check for hidden costs

Leaving your mortgage and switching before the official end of your deal usually involves a fee, called an early repayment charge. Additionally, there might be the usual legal, valuation, and administration costs involved that you should consider.

How to find the best remortgage deals

1 Start searching early

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Remortgaging should not be taken lightly and doing plenty of research and finding a new provider well before your switching date is crucial. If you are considering remortgaging your home, start searching for options as early as possible.

2 Get your timing right

Most mortgage lenders will allow you to secure a rate up to three months in advance – but you won’t have to start actually paying the mortgage right away. For instance, if your current mortgage deal ends in April, but you find a great deal in January, you can lock in the better rate and continue paying off your current mortgage until your switching date, and avoid paying any fees to leave your deal early.

3 Ask your current provider if they can match your new deal

Once you know the sort of deals out there and what to expect, it’s always worth reaching out to your current mortgage provider, as they may be able to match the best remortgage deal you can find. Ultimately, this can save you plenty of time and money, as you won’t have to actually go through the full remortgaging process and switch providers.

Ross Counsell, director of GoodMove, says: “Remortgaging is something which many homeowners will avoid simply out of fear. But, the remortgage process can be extremely important as its one of the best ways homeowners are able to save money.

“A mortgage tends to be the biggest investment in a person’s life, so it’s important to know your options and be aware of any possible remortgage savings. Even if you think this doesn’t apply to you, it’s important to not leave things until the last minute especially in this uncertain climate.”

For more information on remortgaging, visit GoodMove online.