Remortgages - Simple Guide
The remortgage process in England and Wales is much simpler than the buying process. You don't need to engage in the search of a property, you don't have to meet the Estate Agents, undertake viewings or put in offers. You can relax !
You have your property and the idea behind remortgaging is simply to change the mortgage provider who gave you the previous loan to another mortgage provider willing to grant a new loan.
Reasons to Remortgage
There can be a number of reasons why you may choose to remortgage and change provider. Here are some of the most common reasons:
- Your wish to secure a better mortgage product and mortgage rate than the one being offered by the current lender
- Your wish to capital raise further monies on your mortgage for home improvements, a loft extension or for another household item such as a kitchen or bathroom
- Your wish to capital raise for family circumstances such as a wedding, holiday a new car or school fees
- Your wish to capital raise for debt consolidation purposes. (i.e to raise money on your mortgage to pay off other debts)
- Your wish to capital raise in order to rise the deposit on a proposed Buy To Let property
- Your wish to capital raise for business purposes.
You should think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
There can be a whole host of reasons why people remortgage and you can discuss with your Capital Fortune Adviser the reasons for your remortgage. You will then be advised of the pros and cons of using your residential property as a source of further borrowing. This can be a good idea, depending on your individual circumstances, but in doing so, you must always remember that your home is at risk of repossession if you don not keep up the monthly payments. This will be discussed with you by your Capital Fortune Adviser.
Initial Meeting or Telephone Conference
At the initial meeting or discussion with your Capital Fortune Adviser, you will be taken through a Fact Find document. This process normally takes around 45 minutes to 1 hour and the purpose of the discussion is to ascertain your exact needs and requirements.
In doing so your Adviser will obtain an idea of how much you would like to borrow, the reasons for the remortgage and your attitude to risk in relation to the mortgage. This will include a detailed discussion on whether the mortgage should be on a repayment or interest only basis. The meeting will also be used to ascertain what is the most suitable type of mortgage for you, be it a fixed rate, capped, discount offset or another product.
comprehensive panel Mortgage Source
Following the fact find your Capital Fortune Adviser will source your requirements using our national sourcing system. The UK source will come up with a product which is the most suitable and affordable from those available from a comprehensive panel of lenders. This will be the product the Adviser will recommend meets your needs and requirements.
Your Capital Fortune Adviser will take you through both the source results and a Key Facts Illustration on the individual product allowing you to make an informed decision as to whether the recommended product is in fact right for you.
Decision in Principle and Full Application
In the event you proceed your Capital Fortune Adviser will submit an application to the mortgage lender, initially for a decision in principle and if agreed, this will proceed to a full remortgage application.
On application the lender will require proofs of identification and proofs of residence. These are standard requests for money laundering purposes. Your Adviser will also request proof of income. This can be by way of payslips, business accounts, self assessment revenue forms or even personal bank statements.
The remortgage application is initially underwritten and the mortgage lender will request any further documents they feel are necessary. Once obtained, the mortgage underwriter will agree the case subject to valuation and a basic survey of the property will be instructed. The valuation allows the lender to ensure the property is good security at the value/price stated on the remortgage application form.
The property would have previously been surveyed and it is hoped will not have developed any structural defects. The valuation is really concerned with assessing that the value of the property is sufficient to allow the requested loan.
If the valuation is satisfactory, the lender will make a formal offer of mortgage.
Mortgage Offer and Property Conveyancing UK
The formal offer of mortgage is then passed to your conveyancer.
Sometimes the lender offers free property conveyancing but you must remember in this situation, the property conveyancer does not act on your behalf, but acts on the behalf of the lender.
You are, however, able to appoint your own conveyancer. Capital Fortune can provide an instant online conveyancing quote.
The conveyancer will undertake all necessary searches very similar to the searches undertaken when you purchased the property and on conclusion of the searches being satisfactory, the solicitor will advise the lender that the title is good.
On confirming good title, a date will be set for completion.
On completion the new lender will send funds to the solicitor and the solicitor will use these funds to redeem the previous mortgage.
The previous lenderâ€™s charge (or interest) which was registered against the property at the land registry will be removed and the new mortgage lender will register their interest on the title deeds. At this stage, your remortgage is complete
The solicitor will send you a cheque for any monies which have been capital raised minus any incidental expenses. This can be done via cheque or BACS transfer into a UK bank account.
Your next mortgage payment will be with the new lender on the new product and new rate of interest â€“ itâ€™s that simple!
For assistance on any remortgage questions speak to one of our Mortgage Advisers for advice on mortgage features by calling 020 77 100 400 or Enquiry Online.