Should I Remortgage? | A Guide To Remortgaging Your Home

Published: 25/09/2018

All seasoned home-owners have been there at one point or another - you adore your home, maybe can’t bear to even consider parting with it, but it’s just not shaping up in line with your current life expectations. Maybe you have a growing family or now that you’re over 25, are so over the 1960s vintage bathroom vibe.

A renovation, or even just a few home improvements, is of course the easiest solution to your home woes - but these often come with a hefty price tag that, in this economy, not everybody can afford.

So what to do?!

Drum roll, please…

One little word - REMORTGAGE.

Remortgage can be a relatively simple way to save money monthly, that can be banked and directed towards your much-needed (or much-desired) home improvements. You may even lock in such a better rate that you can finally afford that renovation you’ve been wanting.

Let’s take a closer look at your options.

What Is Remortgage?

Remortgage is when you take out another or different kind of mortgage on a property. The process of remortgaging does not usually involve moving home or taking out a second mortgage on the property; it is in effect the transfer of a mortgage from one lender to another, to lock in a better rate (e.g. a cheaper one!). You may also decide to take out a mortgage covering a larger sum of money, so you can use that to make your home improvements. This could be a more affordable option than other types of loans.

When Can I Remortgage?

You can remortgage when your existing deal ends. It is recommended that you start looking around about 14 weeks before your rate ends, so you can find the best option for you.

If you are tied into an initial deal then you might have to pay an early repayment charge which can be huge, often 2-5% of your outstanding loan, so it’s probably best to wait it out.

Should I Remortgage Now?

Absolutely! An interest rise has already occurred this year and there could be another one on the way (Mark Carney, the Bank's governor, said there would be further "gradual" and "limited" rate rises to come, but this will depend on how the economy goes - especially with Brexit). That means people who are on a SVR (a standard variable rate) will need to remortgage their properties to get back onto a fixed rate.

There has never been a better time.

What are the benefits of remortgage?

Remortgaging can enable you to save money by locking in a lower rate.

Usually, when you take out a mortgage, you will be given a discounted or a lower tracker rate. Once that deal ends, you will probably be moved onto the lender’s standard variable rate. This rate tends to be higher. At this point, many homeowners consider remortgaging.

You can reduce your payments by switching to a lower fixed rate with another lender.

Alternatively, you can find a cheaper deal, but keep your monthly payments the same. This way, your mortgage will be paid off sooner. Yahoo!

Can I Remortgage To Make Home Improvements?

This is one of the first questions that people ask our property advisors, and the answer is that it depends on your individual circumstances. In most cases though, where there is equity in your home and you can afford your mortgage repayments, the answer to the question - ‘can I remortgage to make home improvements?’ - is absolutely, YES!

First though, there are a number of things to consider, including:

• What improvements do you want to make? Decorations? Fitting a new bathroom or kitchen? Building work? An entire extension? New garden and a pool?
• How much will these improvements cost? Get estimates done and then evaluate whether the money you will save through your proposed remortgage savings rate will cover it.
• Are other additional costs likely to arise? You should obtain proper estimates for how much the work will cost, including what you’ll have to pay for planning permission and building regulation inspections. You will also need to budget for possible extra expenses which may arise as the building work progresses.

When Should I Remortgage?

When we think about remortgage, or indeed any sort of loan, most think of obtaining the funds beforehand, e.g. before the works on your home begin.

This is actually not the only option, depending again on your individual circumstances.

Remortgaging to pay for home improvements is something that people usually do in advance of carrying out the work.

However, if you have the cash to pay for the work in the short-term, you might choose to remortgage after the home improvement work has been carried out because, depending on the changes you make to your home, you could increase the value of the property, which might mean you have access to more equity for a remortgage. The benefit of this would be that you’ll potentially have access to a wider range of products and thus cheaper rates.

My Mind is Made Up. I Want To Remortgage (And Renovate)!

If you do make an educated decision, with the help of a mortgage advisor, to remortgage in order to make some extra money for home improvements, you will need to find a qualified, experienced and knowledgeable property solicitor to guide you through the process.

Why Should You Remortgage With GWlegal?

• Our remortgage team has more than 70 years of experience between them!
• Your case will be personally handled by a true expert in the field.
• GWlegal also has a five-star Solicitor.Info score based on positive client reviews.

Why are we the best solicitors for you?

GWlegal are a property solicitors based in Liverpool, specialising in buying or selling, remortgage, declaration of trust, bridging and buy-to-let landlords.

If you have a legal matter you wish to discuss don’t hesitate to get in touch. You can call us on 0345 373 3737 email us hello@gw.legal with your question.

Who are GWlegal? We’re a national firm with local values.

Remortgaging a property?

Content correct at time of publication.