When Is Best To Remortgage Your Property

Remortgaging your property entails getting a mortgage from a different lender on the same property. When considering a remortgage, timing is of the essence. Otherwise, you might not reap all the financial benefits. That is why Eatons Solicitors has written this guide to answer all your questions.

At The End of Your Fixed Rate Term

One of the most common times to remortgage a property is when a fixed-rate term ends. It helps reduce the cost of repayments as the homeowner will avoid being on a variable rate, a more expensive type of mortgage. We would recommend starting to shop round for a mortgage approximately 6 months prior to the end of the fixed-rate term.

However, when transferring to another lender, the homeowner can remain on a fixed-rate mortgage. By doing this, they avoid higher repayments. But it requires careful planning.

When Interest Rates Have Dropped

Remortgaging a property when the interest rate drops benefits the borrower because mortgages get cheaper. Therefore, long term, even a slight decrease in interest rates can lead to significant savings.

However, before considering a remortgage, the borrower must calculate whether the savings outweigh early repayment charges and fees. The idea behind such a move is to ensure the borrower has more disposable income.

To Release Equity

To release equity on their property, the borrower must take a higher mortgage than the original one. It helps the homeowner access funds without selling their property.

The release of equity allows the homeowner to consolidate debts or finance more expensive home improvements. It is something to consider if, for example, the property needs structural work or modernising

In these situations, it is necessary to consult a remortgage solicitor such as Eatons Solicitors. They will manage the legal aspects of the equity release correctly.

A Change of Financial Situation

When the borrower's financial situation changes for the better or the worst, they might consider remortgaging their property.

If their situation improved following a wage increase, reduced debt, or a better credit score, they might want to increase their repayments. Therefore, allowing them to repay it quicker.

At the other end of the scale, if the borrower falls into financial hardship, remortgaging allows them to free up funds. In this case, they will want to extend the repayment period to reduce monthly payments.

However, seeking legal advice and consulting a remortgage solicitor is necessary in both cases. It helps the homeowner better understand their options and clarifies the legal process.

Do You Need a Solicitor to Remortgage?

When the homeowner takes out a mortgage with a new lender, you need to ensure that the existing charges is removed and the new charge registered against the property. That is why they need a solicitor to oversee the legal process. Moreover, depending on the circumstances, the remortgage solicitor will also take charge of any changes to the property deeds. It can include removing someone from the mortgage or adding a new co-owner should the homeowner's circumstances change.

When the borrower chooses to take a lower-rate mortgage with their existing lender, they can do it without a solicitor. During this process known as a product transfer, neither the property's legal title nor the lender's legal ownership changes.

The Timing of A Remortgage is Key

Choosing the right time to remortgage a property depends on many factors. These include the homeowner's existing mortgage deal, their financial goals and market conditions. That is why reviewing the different deals mortgage lenders offer and/or seeking advice from a mortgage adviser is advisable.