Remortgaging your home can be a good financial move for many property owners but that doesn’t mean it is right for everyone. People who already have a great mortgage deal or who own less than 25% of the property might not be able to find a competitive deal in the remortgage market. 

Borrowers with bad credit or very small mortgages might also find that the process of applying and paying for a remortgage is not worth the effort or the money. No matter what your personal circumstances are when it comes to your mortgage you should always do your research and carefully consider whether a remortgage is the right option for you. The best approach when you’re thinking about remortgaging is speaking to a professional adviser at Finance Advice Centre. Our team has extensive experience in remortgaging and will explore all options to find the most suitable to your circumstances. 

The pros and cons of remortgaging


Some of the pros of remortgaging your home include:

  •       Having the ability to borrow at a lower interest rate
  •       Making use of your home’s equity to free up some additional money if you need it
  •       The opportunity to switch to a deal that is more suited to your current financial situation if things have changed since you took out your first mortgage
  •       You will have more flexibility to consolidate your debts into a single, affordable monthly payment


There are some drawbacks to getting a remortgage as well which include:

  •       Stretching out your debts across a longer period of time will increase the overall cost
  •       If your home is used as collateral it can be repossessed if you cannot keep up with the payments
  •       There are fees to pay when you remortgage, which might counter any benefits you may receive from negotiating a lower rate on your loan
  •       The process of remortgaging can take a number of weeks to complete, so you need to fully commit to the remortgage to see it through to the end


What happens when you remortgage your home?

If you do decide to remortgage it is generally worth the time and effort to secure a better deal on your loan. The process can also go more smoothly if you know what to expect. Below are a few steps to applying for a mortgage, but keep in mind thes

e steps may change slightly based on your specific situation and the requirements of your lender.


1) Do your calculations

When you have got the nuts and bolts in place in terms of rates, monthly payments, and fees, you can work out the calculations to see if remortgaging is worth the time, effort, and expense. You should determine how long it will take you to start seeing the advantages once you have paid the fees and charges to move your account. If the deal works out to be worthwhile for you, you should pursue it with your chosen lender. These calculations are not always simple to do by yourself. To ensure complete accuracy you should speak to a specialist adviser at Finance Advice Centre who can help you work out the best way to remortgage your property that suits your personal financial situation. 

 2) Complete your application

Your mortgage application can be done online, over the phone or in person at a bank branch. You will likely need to show documentation regarding your current loan, income amount, and other monthly expenses. Also, you will need to authorise the bank or building society to do a credit history check to ensure that you don’t have any late payments or IVAs on your record. A valuation will then be done on your property to make sure you have enough equity to qualify for the mortgage loan. As soon as the bank has all the

 documentation and paperwork it needs the approval and underwriting process can get underway. Providing the right documentation is extremely important and it would be beneficial to speak to a member of our team first to be sure you have everything you need to show to give yourself the best chance of having your application accepted. 

 3) Processing the application

The majority of remortgages with a new lender can be processed within four to eight weeks. During this time, you might or might not be in regular contact with your new lender. If you don’t hear from the bank, it can be a good idea to call them weekly to see where they are in your mortgage loan process. This will give you the opportunity to address any concerns or problems straight away, so the process continues as quickly and smoothly as possible.

4) Approval and closing your loan

Once your remortgage application has been approved you will be able to close your loan. This will involve signing multiple documents and is mostly done in person. When the loan is completely signed off and your previous lender is paid off you can start enjoying the savings that your remortgage efforts provide.


Can you remortgage if you have bad credit?

A remortgage typically occurs to reduce payments, raise money, or consolidate debt. A lot of people who

 are looking to raise extra money or consolidate a loan may have some financial strain. Bad credit does not necessarily mean you can’t remortgage to find relief of your debt or raise the money you need. If you are a homeowner with equity built into your property then a remortgage is possible even if you have bad credit.


What types of remortgage products are available?

When you decide to remortgage it can be overwhelming to choose from the many types of mortgages available on the market. It is beneficial to take the time to research and learn about the different products, so you are prepared to voice your preferences when you speak to a bank or mortgage broker.

Fixed rate mortgage

As the name implies a fixed rate mortgage offers a set rate of interest and a consistent monthly payment throughout the life of the loan. Most fixed rate mortgages come in 2, 5, or 10-year terms. At the end of the fixed rate term, the mortgage automatically reverts to a standard variable rate product, unless the borrower remortgages to a different type of loan at that time.

Standard Variable Rate (SVR) mortgage

The SVR mortgage is the most common type of mortgage product in the UK. Even though a lot of banks charge around two points higher than the Bank of England base rate, the actual rates between banks can vary widely.

Tracker rate mortgage

These mortgages work in a similar way to the SVR mortgage but the rates are directly linked to the Bank of England base rate. When the base rate goes up or down your mortgage will adjust accordingly. This product is growing in popularity with both lenders and borrowers.

For more information about remortgaging get in touch with our team at Finance Advice Centre. Our specialist advisers can answer any questions or queries you may have and help to find the best possible deal for your personal circumstances. 

As a mortgage is secured against your property, it may be repossessed if you do not keep up the mortgage repayments. Think carefully before securing other debts against your home.