The remortgage process doesn't have to feel daunting! With the right preparation, it can be a simple and rewarding experience. Our Essential Remortgage Checklist provides a comprehensive guide. This overview outlines the key steps for homeowners looking to secure better mortgage terms, paving the way for a successful remortgage experience.
Essential Remortgage Checklist: Begin with Understanding Your Current Mortgage Details
Before you begin, it's crucial to have a clear understanding of your current mortgage details. This includes:
Current Balance and Term: Know how much you owe and the remaining term on your mortgage.
Monthly Payments: Be aware of your current monthly payment amount.
Interest Rate and Early Repayment Charges: If you’re considering paying off your mortgage early to secure a better rate, it’s essential to know the terms and costs associated with your current rate.
Organising Income Details
Your income details play a significant role in determining your eligibility for a new mortgage. Here's what you'll need:
Basic Salary and Bonuses: Separate your basic salary from bonuses, commission and overtime as lenders assess these differently.
Self-Employment Income: If you're self-employed, have your latest two years accounts and tax calculations ready, as they contain the necessary financial information.
Account for Other Debts and Outgoings
Lenders will need a comprehensive picture of your financial commitments. Be prepared to provide:
Loan Payments and Credit Card Balances: Include all outstanding debts.
Childcare Costs and School Fees: Detail regular expenses that affect your affordability.
Additional Mortgages or Properties: Declare any other property you own, particularly those with mortgages secured against them.
Engage a Mortgage Broker
To streamline the process and find the best deals, consider working with a mortgage broker. They can:
Source the Best Deals: Quickly identify the most favourable terms from the wider market.
Manage the Process: Handle everything from application to completion, ensuring a smooth transition.
Future Plans
While we can't predict the future, having a sense of your plans can influence your remortgaging decisions:
Planned Moves or Home Improvements: Discuss these with your mortgage broker as they may impact your mortgage strategy.
Anticipated Financial Changes: Inform your broker of any upcoming changes to your income or financial situation.
Submit Your Mortgage Application
Once you’ve found a better rate, submit your application with your broker's help. You can start this process up to six months before your current deal expires. After that, let your broker monitor interest rates and switch to a better deal if one comes up.
Instruct a Solicitor if changing Lenders
Switching lenders involves some legal work. Ensure you:
Appoint a Solicitor or Conveyancer: They’ll manage all necessary paperwork, like drawing up the mortgage deed.
Check Lender Offers First: Some lenders might offer free legal services or cashback options to cover these expenses, hence why it's important to shop around!
Review Your Insurance Cover
In today's fast-paced world, securing your financial future with the right cover is essential. Consider the impact of a critical illness that prevents you from working for a year; could you manage your mortgage and bills without a steady income? This is where financial protection comes in and there’s no better opportunity to review your policies than during the remortgaging process.
Reviewing your insurance policies, including life insurance and income protection, is crucial. Ensure that you and your family are safeguarded against financial strain. Don’t wait until it’s too late—take action now and review your policies for peace of mind.
Your Property Valuation
Your new lender will usually arrange a valuation of your property to verify its value. This step is often free when you remortgage and ensures that your property is worth what you've stated, allowing the deal you've applied for to be finalised.
Mortgage Offer
After completing income checks and the valuation, your lender will issue a mortgage offer. Review this document thoroughly to confirm the terms. Your mortgage broker will do this on your behalf.
Completion
Your solicitor will obtain a redemption statement from your current lender and prepare a completion statement. After you have reviewed and approved these documents, your remortgage can be finalised on the expiration date of your current deal.
Case Study Example
We looked at options for clients whose fixed-rate mortgage was about to end. They told us they plan to move within the next year. Worried about rising monthly payments if they switch to their lender's standard variable rate, we found a lower tracker rate mortgage with no early repayment charges. This way, when they’re ready to move, they can choose a new deal for the full mortgage amount without incurring high exit fees from their current agreement.
In conclusion, remortgaging can be a great option for homeowners seeking better mortgage terms and improved finances. By following the key steps in this checklist—understanding your current mortgage, organising your income & expenditure details, collaborating with a mortgage broker, and reviewing your insurance—you can confidently navigate the remortgaging process.
Regularly assessing your financial commitments and future plans will help you make informed choices and prepare for any changes ahead. With the right preparation and support, remortgaging can lead to significant savings and a better mortgage deal, helping you achieve your homeownership goals more effectively.
Don't leave it to the last minute—secure peace of mind today! Follow this checklist to approach your remortgage with confidence, securing better terms and saving money.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
As with all insurance policies, conditions and exclusions will apply.
Published by Beechwood Mortgages Ref: 219335 with review and approval from Stonebridge Mortgage Solutions Limited who is authorised and regulated by the Financial Conduct Authority Ref: 454811.
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