Re-mortgaging is the replacement of an existing mortgage with a new one. The existing mortgage is repaid when you complete the transfer to the new loan.
At Eric Robinson Solicitors, our expert lawyers have extensive knowledge of the re-mortgaging process and they will work closely with your current lender and your new lender to make sure that the process goes smoothly.
Our lawyers will use the latest paperless technology to provide a bespoke quote for the cost of our services, to advance your matter from the receipt of your instructions, and to keep you fully informed throughout the entire re-mortgaging process.
You may be re-mortgaging to save money or to reduce your mortgage term. This might be possible by switching to another mortgage product with the same lender or by switching to another provider. Remember, if you switch lenders, the savings you make on the interest rate you pay may be partially or wholly eaten up by the transaction charges that your new lender will charge for setting up the new loan.
There are other considerations to take account of too. Your existing lender may demand redemption fees, and may charge you a penalty. The new lender may charge an arrangement fee and will want to value the property, just as your old lender once did, so you may be required to pay surveyor fees as well. There will also be the cost of search fees and a Land Registry fee to pay to register your new lender’s charge.
What does re-mortgaging mean?
Re-mortgaging means moving your mortgage to a new lender while staying in the same property.
Is re-mortgaging a good idea?
Re-mortgaging can be an effective way to save money on your monthly mortgage payments. Most people re-mortgage to secure a lower monthly rate of repayment, which usually derives from securing a more competitive interest rate.
Are there other reasons why people re-mortgage?
Aside from seeking to reduce the rate of monthly repayments home owners may choose to re-mortgage in order to raise capital by withdrawing equity from the property, or re-mortgaging may be used as a means of consolidating other more expensive short term debts.
Can there be hidden costs when re-mortgaging?
Although your chosen lender will take you through the details relating to your new mortgage it can sometimes be difficult to make a clear comparison with the terms of your existing mortgage terms. In some instances, the monthly saving that you stand to make can be outweighed by the fees that you will be required to pay to your new lender to secure the product. It therefore important that you consider all of the costs.
What is an arrangement fee?
An arrangement fee is the charge that your new lender will make to secure their product. You may also be charged a further fee by any mortgage broker that you use on account of the cost of their service.
What is an early repayment charge?
When you take out a mortgage you are usually required to retain it for a minimum period (i.e. 2,3 or 5 years). This minimum fixed term period usually runs for the same period as the headline interest rate. If you want to re-mortgage and move to a new lender before the expiry of your minimum fixed term period, your existing lender may charge you a penalty fee. The penalty fee may be a fixed amount, or a percentage of the overall outstanding balance of your loan. Once your minimum fixed term period has ended you will be free to move to a new lender without incurring an early repayment charge.
Do I need to get my house valued when I re-mortgage?
This will depend entirely upon the requirements of your new lender however it is normally safe to assume that a valuation will be required.
How many times can I re-mortgage?
There is no limit on the number of times that you can re-mortgage however you will need to bear in mind that every time you move to a new product you may be required to arrangement fees, and if you re-mortgage during the minimum fixed term period on your existing product you may incur an early repayment charge.
Can I re-mortgage with my existing lender?
Yes. When you re-mortgage with your existing lender the process is normally a little more straightforward as you will only be required to agree to the terms of the new product. This should mean that there is no need for you to have a valuation carried out but this is not always the case. Each lender is different and will impose their own requirements.
When do I need to instruct a lawyer?
Normally it is only necessary to instruct a lawyer to act on your behalf when you choose to re-mortgage with a new lender.
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Residential Conveyancing Department