Sarah is here to help house buyers and sellers get to grips with the conveyancing process. This month, she explains the process of re-mortgaging…
My current mortgage is coming to an end. Should I look for a new deal?
A mortgage is essential for most people who want to buy a house. It is also likely to be the biggest financial commitment you will ever make.
If your current mortgage product comes to an end, or your situation changes, you should think about re-mortgaging. It is quite normal to be unsure about doing this, but it can help you secure a better interest rate.
There are a number of reasons why you might want to re-mortgage:
- The value of your home has increased
- You are worried about escalating interest payments
- You want to overpay and reduce your mortgage
- You want to alter the type of mortgage you have
- You want to borrow more money
- You want a more flexible mortgage product
Unfortunately, the ongoing coronavirus pandemic is making it harder to secure a new mortgage, especially if you are self-employed or your finances have been adversely affected by the situation, so do your research first.
Who should I approach for advice on re-mortgaging?
If you are in a position to consider re-mortgaging your property, I would recommend contacting an independent financial adviser (IFA). If you are unsure who to use, your solicitor may be able to recommend an appropriate firm.
An IFA will review your personal circumstances and let you know which products work best for you. Once you have this part of the transaction sorted, you then need to appoint a solicitor to deal with the re-mortgage on your behalf.
Your solicitor will require your existing lender’s details to obtain information about the loan you have currently and ensure it can be repaid. Hopefully, they can then complete the re-mortgage in the timescale suggested by you.
It is important to consider any early redemption penalties and other charges when deciding on the right time to repay your old mortgage. This is something you can discuss with your
solicitor, as they will obtain a repayment figure from your lender. You will need to review this before the new mortgage transaction is completed.
Your solicitor will also send you a report detailing the conditions of your new mortgage, to make you aware of your obligations moving forward. This will include confirmation of the amount you are borrowing and the type of loan you are taking out, be it repayment or interest only.
I have extended my property since my original mortgage was granted. Does this matter?
You need to make sure you have any requisite consents in place for the alterations that have taken place to the property and up to date receipts for payments made, such as ground rent or service charges, if applicable.
Your solicitor will also want to see a current copy of your buildings insurance policy before they complete the re-mortgage.
To find out more about re-mortgaging a property, don’t hesitate to contact me or my conveyancing colleagues on (0114) 218 4000.
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