Cost of living: could remortgaging lower your monthly costs?

Why remortgage?

Many households are looking to reduce their monthly outgoings. There are, of course, many ways to do this, but one method that is becoming increasingly popular is remortgaging.

Remortgaging is often pursued when the fixed term period of a mortgage is nearing its end in order to secure a new period of fixed terms of interest. Additionally, some opt to remortgage so that they can invest the freed-up capital into renovations. These two scenarios are still common, but in recent times a third reason has become increasingly popular.

Many homeowners have sought to remortgage their property either to reduce monthly costs or to receive a lump sum, which can be used to combat increased cost of living expenses.

Top tips

Staying with your current lender will be a simple process when your mortgage comes to an end. However, the offers presented to you will only be a small fraction of what could become available if you were to switch lenders.

Switching lenders is undeniably more complex but will afford you a wider choice of lenders, making you more likely to find the best possible deal.

We would suggest speaking to a mortgage broker in the first instance.

The remortgaging process

Whether you have previously remortgaged your property or it is the first time, it is helpful to understand the process:

1. Title deeds will be obtained from the Land Registry and checked by your conveyancer.

2. An initial mortgage redemption statement from the current lender will be requested.

3. The terms of the new mortgage will be checked; any special conditions noted in the offer will need to be noted by the conveyancer at an early stage to minimise any delay and to ensure they are complied with.

 Examples of these terms are as follows:

• Having to provide a copy of the building insurance policy between exchange and completion
• Having to provide an occupier’s deed of consent from any individual over the age of 17 living at the property.
• Having to repay any existing residential mortgage or personal loan before a time provided.

4. Depending on the lender’s requirements, as to searches, it may be necessary to carry out a number of standard conveyancing searches. However, the majority of lenders may instead insist upon a “no search indemnity policy”.

5. Once the conveyancer is satisfied they have undertaken all necessary due diligence, they will request the mortgage advance is sent to them by the mortgage lender. 

6. This mortgage advance will then be used to discharge the current mortgage noted on the title, and any residual funds will be sent back to the client after having deducted solicitor legal costs. 

7. The title deeds will be amended and registered with the Land Registry to show the change in the lender.

Contact our residential property solicitors

Our residential property department has a wealth of experience and would be delighted to assist with your remortgage conveyancing requirements. We have offices in Brighton, Eastbourne, Hastings, London, Uckfield, and Ulverston and serve clients across the United Kingdom.