Can anyone explain what happens when you remortgage?

[MichaelFinnigan]

We've not done it before. Our three year fixed rate mortgage is about to come to an end

I assume we could do nothing and it would move to a standard variable rate?

If I shop around and can see a better offer, or if we decide we want another fix do we have to do that immediately or will be on a sort of rolling contract that we can leave whenever we like?

And if we do want a new mortgage do we have to have the house surveyed again? Or valued?

And does that cost £? And will they look closely at our finances again (have had another maternity leave since we got our mortgage and we are not as financially healthy as we were

Contact your current providers and see what they are prepared to offer you - it's bound to be better than SVR - then they will move you onto the next deal with little fuss or investigation, presuming you are not looking to borrow more.
or
Phone other places, or better still see an independent financial advisor and see if there's a better deal out there for you. If you are going to a new provider then obviously they will need to check their money is safe, so will need all the evidence both that the house is viable and that your income is viable.
Either way they'll charge you a fortune in admin fees under a variety of names.

If you stay with your current lender, it is unlikely that they will value the house again and you probably won't have to provide all of your documentation (bank statements / wage slips etc) again. We recently remortgaged with Nationwide and although they asked various questions about whether our income was still the same, whether we had any new loans / commitments, the remortgage was done in a phone call. Most products have quite a hefty admin / application fee though (even if you stay with the same lender – we had to pay £900 – but we save about £150 a month by switching from the SVR to a fixed rate, so it was worth it). Or some are "fee free" but the interest rate is slightly higher. Work out which is best for you.

As for when you can do it, if you're on the SVR yes, thats effectively just a rolling contract so you can do it any time.

If you go with a different lender, you'll no doubt have to go through the whole process again of completing the application, providing documents, having a survey etc. Some lenders will arrange the survey for free and pay any legal costs as part of the deal, some won't. Just check. We got in touch with London & Country (after a recommendation on here). They search the whole market for you, and there is no fee. You tell them what rate you're on now, what figures you're talking about in terms of the loan and they will come back with options e.g. by rate and what upfront costs you'll have to pay. Definitely worth a call.

Thanks, that's really helpful

We used London and country for this mortgage

Ok, so realistically when our current deal ends we need to be prepared to cough up £1k or more any which way we do things (unless its included and has a higher rate etc)

Hmmm we'd not budgeted for that foolishly. Better start saving

Not necessarily - e.g. nationwide (not plugging it, just that I can log on fairly easily), they have a 2 yr fixed rate at 1.99% (with a fee of £999) or a higher 2.39% rate (with only a £99 fee). It depends, on your circumstances, with your figures, which works out cheaper and whether you're likely to want to remortgage again at some point in the future. Most lenders will also add the fee on to the mortgage amount, so you don't have to pay it upfront. Some also offer cash back as part of the deal so even if you do choose to pay a fee, you could potentially use the cash back amount towards that.

It's so complicated. And such huge amounts of money. I just don't feel qualified to make a decision. I know I can use L&C but it's overwhelming, I wouldn't buy a washing machine or a car knowing so little about how it worked yet here we are chucking around hundreds of thousands with very little understanding of even the basic stuff

So, we had a statement a while bank and apparently we'd paid of some thing like £3k in two years. I was horrified.

Our mortgage was £167,000 we had £40k as a deposit. We pay £800 per month.

I think our house which was £202k when we bought it is probs worth £210k now going by recent sales of identical ones in our street. I think our rate was 4.7 or something, can't remember

So I think our LTV ratio might have decreased a bit?

Last time we remortgaged we stayed with our previous lender as it was easier than going through the whole process again with another lender. Usually you'll get sent a list of deals the lender is prepared to offer you and yes, if you choose another one you can get the admin fee added to your mortgage balance rather than paying upfront. The best ones are often the most expensive

I'm not sure whether remortgaging will be included in all these new checks the banks have to make from April this year? If so how does this affect people who have a mortgage but whose circumstances have changed - anyone know??

I know Nationwide use their own in house price index to see what a house is worth now - I think most lenders use these type of tools rather than completed sales in the street (if you stay with the same lender). If you go through a different lender, they will probably do a full valuation and you're more likely to have the valuer look at sales in the local area.

You are right though that only a tiny proportion of your actual payment goes to reducing the capital (in the early years), most of it is interest.

If your LTV has gone down I think you'll probably get a better deal than 4.7% now.