With the Bank of England lowering the base rate to 0.1% and the current circumstances making us all consider our living costs is it time to consider a remortgage? What does remortgaging mean? A remortgage is when you change the mortgage you currently...
Remortgaging: reducing your monthly mortgage payments
- AuthorEnel Ots
With the Bank of England lowering the base rate to 0.1% and the current circumstances making us all consider our living costs is it time to consider a remortgage?
What does remortgaging mean?
A remortgage is when you change the mortgage you currently have on your property either by switching it to a new lender or by moving to a different deal with your existing lender.
How can remortgaging reduce monthly mortgage payments?
The main reason for remortgaging is to reduce your monthly repayments. However this needs to be weighed up in considering also any early redemption fees, arrangement fees, valuation fees, broker costs and legal fees.
Our mortgages only last a short time such as two or five years being a typical rate offered on fixed or variable products and when it comes to an end the lender switches the interest rate to the Standard Variable Rate.
If you have a tracker mortgage you may see your mortgage cost drop but for fixed mortgages the rate will not change during the fixed period.
It is likely we will see mortgage lenders drop their fixed mortgage rates now and it is a cheap time to remortgage and perhaps also see better mortgage terms.
How to remortgage your property
A remortgage will require a solicitor or conveyancer unless you are only borrowing more on your existing mortgage deal with your existing lender or merely transferring a product and then no legal work is required.
All lenders maintain a panel of solicitors who they agree to instruct to act for you as well as the lender themselves. By using an experienced conveyancer or solicitor they will ensure that all details have been accounted for and you are protected legally and financially and at the same time working your transaction with speed and efficiency.
The process of remortgaging
The process involves ID checks, redeeming your existing mortgage, title checking, leasehold checks if a leasehold title, property searches if required, checking terms and conditions of the new offer, land registry searches and completion and registration of the new mortgage.
How long does it take to remortgage?
A typical remortgage transaction can complete in a week from the solicitor or conveyancer receiving the mortgage offer.