Mortgages are generally people’s biggest financial commitment, taking up a large portion of their monthly outgoings. Lenders are more cautious while economic uncertainty continues. Remortgaging your home may seem like a good idea. Chances are, you may have considered this but do not know how to begin the process. The good news is that it is relatively easy to go about remortgaging a home, even if you have a dozen questions buzzing around in your head. This blog post will answer some of the most pressing frequently asked questions and help you understand how to get started.
How To Remortgage Your Home: Answers to Common FAQs
You may have unique reasons when you decide to have your property remortgaged. However, if it is the first time you will be in this position, here are a few of the most asked questions at the beginning of the remortgage and conveyancing process.
Why Might I Remortgage?
There are several reasons to think about remortgaging but the main reason is going to be saving money…Maybe your current deal is about to end. Many introductory mortgage offers only last a short time, often two to five years. This is the typical length of time offered on a fixed rate, tracker or discount mortgage. The most common time to remortgage is when this fixed or introductory tracker or discounted rate on your mortgage ends.
- Mortgage Term Ended: Once your introductory mortgage offer has ended, you will be on the lender’s Standard Variable Rate (SVR). It is unlikely this will be the cheapest option, so remortgaging is going to be something you will have to think about. Your lender may be happy to retain your custom so this should always be your first port of call.
- Better Rates: If you are tied into an initial deal you might have to pay an early repayment charge of up to 2-5% of your outstanding loan. Regardless of exit fees, the savings can be huge
- Change Of Personal Circumstances: If your current mortgage is no longer the most appropriate, a different type with different terms might suit you better.
- Flexibility: The predictability of a fixed-rate remortgage might be more important than low repayments. Or maybe you’re earning more than when you took your mortgage out . Flexible features usually come with a slightly higher interest rate.
- Raising Extra Money: Affordability will be reassessed by your lender to make sure you’re not over-stretching your finances
When Is Remortgaging A Good Idea?
Making sure you have the best deal is important as it can save you hundreds each month. If you already have a mortgage and are looking to change lenders, we can help you through the remortgage conveyancing process. There are signs of a strong recovery for the remortgaging sector as 2021 progresses, as rising house prices boost homeowners’ equity allowing them to benefit from better loan-to-value products.
If you feel that you may be able to get a better deal on your remortgage, or if the value of your home is higher, if you plan to consolidate your debts, or if you want to get ahead of a spike in interest rates, remortgaging may be a good idea.
Do I Need A Conveyancer When I Remortgage?
The answer to this question will depend on your situation and how you plan to remortgage. If you are getting a remortgage under the same lender or plan to borrow more under your existing deal, you do not need to hire a conveyancer to get your remortgage.
However, if you are going to shift to a different lender, it will involve new legal documents. This will warrant the need for a conveyancer when you have a remortgage done.
It is especially important to employ a conveyancing expert when:
- Adding Someone To A Mortgage: you will need a solicitor as ownership of the property is changing. This is known as a ‘transfer of equity’. Deeds will have to be amended and paperwork drawn up specifying how you will own the property.
- Removing Someone From The Mortgage – as above, this means that the ownership of the property is changing so a solicitor will be needed to amend the deeds.
How Long Does It Take?
The entire process for remortgaging may take any time between four to eight weeks from start to finish. There is no set time frame for this process. However, you can make it go by more quickly if you have all the needed information and documents ready when you apply.
What Does The Process Of Remortgaging Look Like?
You will first be asked to supply the needed information about your property. Depending on if you plan to work with a conveyancing solicitor or not, you need to gather the information asked of you by your lender. Lender requirements may vary, and it is best to look into all these necessary documents and conditions before applying. Once you submit your records and a completion date is arranged, you will then be able to receive the money from the lender. If you had chosen to shift to a new lender, your solicitor would work to take care of any post-completion formalities, including updating the land title in the Land Registry office.
Remortgaging If You’re Self-Employed
It’s becoming harder to get a remortgage if you’re self-employed. For example:
- Self-employed applicants will only be able to borrow up to 60% of a property’s value from Santander.
- Halifax: self-employed borrowing is limited to 4.49 times annual income.
- HSBC: not currently lending to self-employed applicants whose income has been impacted by the recent tightening of COVID-19 rules. Applications will reopen after the lockdown ends.
- Nationwide: self-employed applicants can borrow up to 85% LTV.
- Natwest: if a self-employed applicant has had a Self-employed Income Support Scheme grant, the proceeds will not be considered as income.
- TSB: self-employed applicants can borrow up to 75% LTV. Borrowing is limited to 4.25 times annual income.
You will need at least two years of accounts to prove your income.
This can be done in one of two ways.
- Business Accounts. Preferably three years worth of accounts — though two can sometimes do. They usually need to be signed off by an accountant.
- Tax Returns. If you can’t show business accounts, two or three years’ tax returns are the next best option. You’ll be assessed on profits, not turnover.
It may seem like a lot, and the process of remortgaging and conveyancing may be overwhelming, especially if you are trying to figure out the process independently. Along with working with a conveyancing solicitor, using a conveyancing quote comparison tool will help make the process easier.
If you are looking for a comparison tool for comparing conveyancing solicitor quotes for your remortgage, work with the Conveyancing Store. We want to make the process easier for you by providing you with the most accurate and best conveyancing quotes! Take advantage of this useful tool when you compare quotes today!