If you are going through a tough situation with the mortgage you have upon your property, you can surely try to move on through remortgaging the property. Yes, the situation can turn against you any day and earlier the amount you used to pay as mortgage installments can seem to lump sum during the economic crisis. Therefore, you need to switch on the scheme to get a better one, where the interest rate remains moderated as per your expectation.
Well, remortgaging is nothing but transferring the mortgage from your old lender to a new one to get some facilities better than that. The process might seem easier, but it is not so. You need to know about its details well to get over it properly. It also involves a little expense. So, if you want the details to keep your eyes here.
Search indemnity insurance will be the basic thing you need to get at first. While going for a property purchase, you must have searches undertaken with a variety of agencies. It approximately costs £200. However, when it comes to a remortgage transaction, solicitors need to purchase Search Indemnity Insurance. This insurance is purchased to cover if something has changed from the time when the original searches were done. This is basically to insure the genuineness. Well, the fees vary depending upon the size of the mortgage that is already there upon the land but is usually around an amount of £30. Some lenders, in fact, insist on going through such searches for their safety purposes. If this is the case, it is also important to check with the Land Registry that there have been no changes to the Register in the period since it is obtained from your Office Copy of the document. This referred to as an OS1 search and it makes sure that changes such as new mortgages have been taken out on the property in the meantime.
Now, coming to the matter of expenses related to the procedure.
- You need to pay for getting the office copy.
- You need to pay for going through the in-depth searches on the property.
- You need to pay a certain amount as land tax (SDLT).
- You need to pay a little for transferring the amount from one bank account to another.
Above all, you need to hire a conveyancer to make sure all these happen in its right form and the hiring charges are different than all these. However, you can make it cheap by going online to compare conveyancing fees and get one conveyance in your budget.
How to Remortgage for a Better Deal
Shooting with the same mortgage lender for the life of your mortgage does not apply to the majority of borrowers. Traditionally, you’ve taken a mortgage and stayed put for the entire term of the mortgage but lately, more and more borrowers have realized that this may not make financial sense.
Not being proactive in shopping could mean paying the high price for the biggest financial commitment of most people’s lives.
Many borrowers have put off the idea of switching mortgages looking back to the days when they first bought their home, the seemingly endless saga of loan application and approval, legal work, the l packing and moving. Securing a remortgage is in comparison a simple process; it usually involves the amount of paperwork, pressure, and stress. In many cases, this simply means transferring your loan to a new lender for a more favorable rate of interest.
The Remortgaging Pros will in most cases mean reducing your monthly repayments. It can also be a good opportunity to review your finances as you can decide to repay some of the principal or you can even raise additional capital that way, borrowing on competitive mortgage rates could be more favorable than seeking funds Unsecured on generally higher interest rates.
The cost of arranging a remortgage is of course much lower than buying a property – there is no stamp duty to pay, no real estate agents to settle and legal fees minimal involved, but remortgaging does come at a price. You may be subject to a valuation fee as this will usually be a condition of the new mortgage, although the lender may cover this charge on your behalf.
The two main costs to consider are the lender arrangement fees and the early exit charge / early redemption fee. Many lenders charge a percentage of the mortgage balance if you redeem the loan in a certain amount of time. These rates differ enormously and some specialist lenders will even go as high as 6%.
The sharp increase in arrangement fees is due largely for the lenders need to make a profit. Competition in the marketplace has seen more competitive pricing and attractive offers that have meant that the profit margins of lenders are not as they used to be.
Remortgaging Step By Step
- Towards the end of your tie in the period, approach your current lender to find out what they can offer you. It’s worth remembering that this could mean less paperwork and ultimately lower costs.
- Calculate and review the fees and fees applied to move away from your current lender. If these are too high, then you want to stay where you are until the tie finishes.
- Make sure you shop! Compare what your lender offers to what is available elsewhere. Compare the APR that will take into account the costs and associated costs.
- Select your favored mortgage product. Start the ball by making an application.
If you use your own lawyers, contact them about remortgage, some mortgage lenders will provide the services of their own lawyers. Once the assessment is complete and all other relevant documents, subject to the approval of your lender send you a formal mortgage offer. Sign the documents and the transaction will be almost complete.