Can I still remortgage during COVID?
Yes, you can still remortgage during the coronavirus pandemic. An expert property solicitor can help you with the legal paperwork involved in remortgaging. For many, remortgaging offers the ideal opportunity to seek out a better mortgage deal, especially for those whose fixed-term or fixed-rate mortgage is coming to an end. Finding the best remortgage deals can bring numerous benefits, from offering homeowners an opportunity to reduce their monthly mortgage repayments or even pay off a mortgage earlier. Others choose to remortgage to release equity or remortgage for debt consolidation. The property solicitors at Graysons will answer the most frequently asked remortgage conveyancing questions, as well as advise on remortgage options during the current pandemic.
What is remortgaging?
Remortgaging is when you replace your existing mortgage with a new mortgage. There are numerous reasons people choose to remortgage. One of the most common reasons is to secure a more competitive mortgage rate, reducing monthly mortgage payments. If you are considering remortgaging an expert property solicitor or conveyancing lawyer will be able to help with the legal paperwork required.
Are lenders still offering remortgaging products?
Most lenders in the UK offer remortgaging products, and while some lenders have changed their lending criteria during the coronavirus measures, most still have a range of remortgage products available, including now offering some of the best remortgage deals. However, banks and lenders have said that they may be somewhat slower than usual now as they are extremely busy due to coronavirus related issues and processing mortgage holiday claims. An expert property solicitor can help keep your remortgage on track, by efficiently carrying out all the legal paperwork for you.
How have mortgage rates changed during coronavirus?
Due to the COVID-19 pandemic, mortgage rates have dropped to an all-time low. On March 19, 2020, the Bank of England cut its base rate to 0.1%, the lowest in the bank’s 325-year history. This means if you remortgage now you will likely pay less interest on your mortgage loan. The latest mortgage rates offer an excellent opportunity for savvy borrowers to switch to a more competitive deal and save money.
Can I save money by remortgaging?
Yes, with interest rates currently set at just 0.1% by the Bank of England, borrowers can save a considerable amount on their monthly mortgage payments by taking advantage of the best remortgage deals. While some people opt to remortgage to release equity or for debt consolidation, switching to a better interest rate to reduce monthly mortgage payments is one of the most popular reasons people choose to remortgage. If you want to save money on your mortgage, then contact the team at Graysons and let our property solicitors help with your remortgage.
Do I have to change lender when remortgaging?
No, you do not have to change lender. If you remortgage with the same lender, this is called a product transfer, which can include switching to a new rate, loan amount, or changing the term of your mortgage. However, often the best remortgage deals can be secured by changing lenders. If you remortgage and change lenders, you will need a property solicitor or conveyancing lawyer, such as the team of legal experts at Graysons, to handle the remortgage for you.
Can I remortgage if I am on furlough?
The furlough scheme, or job retention scheme, is open until the end of October 2020, although it is changing from the beginning of August. Lenders are likely to review their policies too, but at present, most have said that they will accept remortgage applications from furloughed workers seeking the best remortgage deals.
In May 2020, the top 10 mortgage lenders in the UK confirmed to “Which?” that they will not carry out affordability tests on existing customers wishing to remortgage on a like-for-like basis, so customers will not be affected if they have been furloughed. However, if a customer wishes to borrow more money, their finances will be assessed.
Typically, however, if someone is applying to another lender, their finances will be assessed. Most lenders have said that they will only take into consideration the furlough pay – so you might be assessed for affordability based on 80% of your wages if you are not receiving an employer top-up. However, some lenders have said they will also take employer top pay up into account.
You will need to look around to find the right lender as, unfortunately, some have capped loan to value rates (LTVs) – some even down to as low as 60%. Whilst this should bring a lower interest rate, it also means that a buyer has to find a 40% deposit or, as a remortgage of only 60% of the value of the property can be taken.
Why should I remortgage my house?
There are many reasons why you might want to remortgage your property – everyone has different family lives and there are several reasons why a remortgage might be useful to you.
Here are some common remortgage options:
The Bank of England base rate is currently 0.1%, so, if your fixed-rate mortgage is about to come to an end, now could be a great time to find a different mortgage offer at a cheaper interest rate than you are currently paying. It might be possible to simply change to a different mortgage product with your existing lender to get the best remortgage deal – they will call this a product transfer. However, you should look around, as, even though over 900 mortgage products have been withdrawn since the beginning of the COVID-19 lockdown, there are still thousands of remortgage options available. Do be aware that if you move out of a fixed-rate mortgage before it comes to an end, you may be stung with large repayment fees or exit fees, so do make sure that you weigh up all the costs against the savings you would make by getting a new mortgage deal. If you decide to stay with your lender at the end of a fixed rate, you will probably be moved onto that lender’s standard variable rate (SVR) – which is likely to be quite high.
Getting a better deal
If, for example, the value of your property has risen significantly since you took out your mortgage, you may want to take out a new mortgage based on the current loan to value rate (LTV). With a lower LTV, you can usually secure a mortgage with a lower interest rate. LTV rates of 80% or less usually attract the lowest interest rates.
Remortgage to release equity
You might wish to raise money to carry out renovations on your existing property, such as new windows, loft conversions, extensions. Remortgaging your property can fund improvements that not only give you more space but can increase the value of your property in the long term. Alternatively, you might want to remortgage to release equity in your home to buy another property. You will need to have enough equity in your existing property to either buy the new property outright or find the deposit needed to buy the new property. You may also be able to remortgage your existing property to purchase a buy-to-let property. You only need to check this with your lender if you decide to move into the new property and change your current home into a buy-to-let property. Don’t forget your monthly payments will increase if you increase the value of your mortgage, so do make sure repayments are still affordable.
Remortgage for debt consolidation
You may wish to remortgage your property to pay off debts. This should be possible but do be aware that it is not usually the cheapest way of doing so. Whilst the interest rate is likely to be cheaper than a loan, you will probably pay more in the long run due to the length of time you have left to pay off your mortgage as opposed to a short fixed term loan.
Paying more off your mortgage
You may be in a position where you want to pay more than your monthly mortgage payments so you pay off your mortgage quicker. However, some lenders don’t allow this, so you may need to look for a different lender and remortgage your property.
How can Graysons’ property solicitors help with my remortgage?
If you are switching to a new lender, you will need the best conveyancing solicitors or property lawyers to carry out the legal work required. Graysons team of property lawyers have helped thousands of clients ensure that their remortgage runs smoothly.
What will a property solicitor help with during a remortgage?
Much of the work property solicitors do is carried out in the background, but some of the main tasks include:
- Conducting ID checks
- Obtaining the title information document (title deeds) from the Land Registry
- Obtaining a mortgage redemption statement from the existing lender
- Checking your new mortgage offer and ensuring the property meets the new lender’s conditions
- Carrying out:
- a bankruptcy search
- a Land Registry priority search
- the standard searches if required by your new lender (local authority, coal mining, water and drainage, and environmental) or obtaining indemnity insurance if they don’t require these
- Completing the remortgage and paying off the old mortgage
- Removing the old mortgage and registering the new mortgage with the Land Registry and removing the old mortgage
Contact our team of property solicitors now to discuss your remortgage conveyancing needs, or to make an appointment, which at present will be by telephone, email, or video call. We are taking steps to reopen our offices to clients, consistent with the most recent government guidance. Further information can be found on our COVID-19 web page. You can also find out much more about remortgaging and buying or selling property on our web pages.