How to Remortgage My House

It would be reasonable to assume remortgaging is easier to understand than getting your first home loan. Of course, anything to do with refinancing or applying for a property loan tends to be more complex than many people imagine. We have put together a list of the most commonly-asked questions surrounding the arrangement of a new loan to replace your existing one. Many people switch loans to get a better deal, but there are all kinds of circumstances and queries that can arise while doing so.  If you are self-employed you may find it harder to get a home loan to start with. There are some horror stories surrounding self-employed people who cannot get the loans they want. While all lenders will in theory grant loans to self-employed workers, some lenders focus on this portion of the market, so it needn’t be as difficult as you may think. You must provide at least one years’ worth of accounts to back up your income claims, and if you can provide more than that, you should be fine. It’s about providing proof more than anything else. If you can prove you are earning enough to be accepted for a deal, being self-employed shouldn’t be an issue. This applies when looking to switch your loan to a better deal too. Proving your income is key, but you should also be able to point to future work. This shows the lender you still have a good flow of income. Add in a good credit score and you shouldn’t have any concerns.  It depends which deal you end up accepting. If you are simply switching from one deal to another without moving lenders, you won’t need to get a solicitor to help with the process. However, if you have found a better deal with another lender, a solicitor will be required. Often a lender will provide the solicitor for you as part of a package deal. This is often free, but it is wise to check ahead of time. There is no point paying for a solicitor if you don’t need to.  You can, but you may not want to. This is because a fixed term deal has been agreed. If you wish to exit the deal early, there may well be financial penalties involved. This can wipe out any positive effects of switching deals. Sometimes though, it might work out better to foot the bill and switch loans. If you would save a lot of money by switching to a loan with a much lower interest rate, it would be worth paying the exit fee. To find out whether this applies in your case, use an online calculator to work out the figures. This scenario is most likely to arise if you took out your home advance at a time when interest rates were higher than they are now. If they’ve dropped and are now lower than they were when your existing deal began, you stand a better chance of gaining financially following a change of deal.  Yes, absolutely, although it is wise to check the different deals on the market before committing to a decision. Moving your loan to another one offered by the same bank (or building society) means the process should be smoother. This means the process doesn’t require you to use a solicitor to complete it.  The short answer is – it depends. When on maternity leave, your income will likely be lower than it would normally be. A lender would therefore consider your reduced income when calculating whether you could afford a different loan upon switching. Some lenders are more flexible. For example, let’s say you have been on maternity leave for a few months and you have a letter confirming your return to work date in the next month or two. In this case, you can prove when you are going back and when you will get your full salary again. A decision may then be based on that information. Similarly, if you are going back part time, evidence of this and of your adjusted income will be used when calculating the affordability of a different loan. One crucial element to consider here is honesty. Don’t assume that because a lender doesn’t ask about such things as maternity leave, you don’t need to mention it. This applies if you know your circumstances are going to change for other reasons too. For example, you might be switching from self-employment to regular employment, or vice versa. You might be changing jobs. Anything that will cause a change a to your financial situation, or has already done so, should always be declared. At best, not doing this might lead to a withdrawal of an offer. At worst, it could be construed as fraud. If you’re unsure, mention it.  This doesn’t apply to those who are remortgaging their own property. However, if you own one or more buy-to-let properties, it would be reasonable to ask are remortgage fees tax deductible. The good news is you can deduct the legal fees you would incur in this scenario against the profits you will gain from rent. Since these are not capital expenses, you are able to include them in your annual accounts. Talk to your accountant if you wish to know more. They can provide the latest information and advice for your specific circumstances.  Conveyancing is a word you’ll likely encounter when you’re thinking about remortgaging your property. If you switch from one lender to another, you will need a solicitor to handle the legal process involved in doing so. This is also known as conveyancing. Your solicitor will perform the relevant checks required when changing the mortgage on your property.  It’s common for people to ask about timescales when they’ve put in the work to switch from one lender to another on a better deal. On average, the conveyancing and remortgaging process will be completed in around four weeks. This considers the time elapsed from application to completion. If your situation is more complex, conveyancing may take longer to complete. However, your solicitor should keep you informed of their progress and what is happening. It is important to remember to give your solicitor all the documentation they require to complete the legal work. Taking longer to do this will only delay the process. The sooner you can get them the paperwork they need, the sooner they can begin their part of the process.

Published on 26 September 2018

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