I own my property outright can I remortgage?
One of the most idealistic situations in life is to pay off your existing mortgage and own a house. Lots of benefits can be acquired after it, such as applying for a remortgage.
Now the question arises – what is remortgage?
A remortgage can mean two things – one is taking out a loan over a property that is free from mortgage and the second is that you have the mortgage but you change over to another lender in order to get a better financial deal. There could be various reasons why one can feel the need to apply for remortgage, for example, it could be because you want to pay off an expected bill, get your roof fixed, pay for your child’s education, and many others. Whatever the reason may be, if you own a property then you can apply for remortgage and how much money you can apply depends on the value of your property.
How does remortgaging work?
A remortgage is a little complicated; however, the benefits are immense. You just have to make sure that before applying you have properly done your research as well as thorough planning. When you apply to a lender for remortgage, you will receive money by keeping your property as a security to them. The lender will set up new repayment terms, which you will have to follow strictly otherwise you will have to give part or whole of your property.
You can choose to apply remortgage to the same lender who provided you with the mortgage loan, but before you make that decision you need to do a little bit research in the market and see if some other lender in providing a better deal. In addition to that, there are always some hidden charges that lenders are not really open up about initially, so the consumers have to ask these questions themselves after getting a considerable amount of knowledge about remortgage industry – this comes very usefully when comparing different lenders in the market. Besides all that, a few hours spending on studying about this industry will help you save a lot of money on hiring a solicitor who gets you through all the legal procedures involved in this deal.
How can you remortgage your property
After learning about what is remortgage and how it works, now it is time for you to know how you can actually remortgage your property. The first and foremost thing that you have before filling out the application, is to know the real worth of your property. Even if there is some repayment left on your mortgage, you can still take out the remortgage loan but you will have to calculate the loan-to-value ratio. This will determine the amount of loan and the rate that you would be paying on that loan.
Now the question is how to calculate the loan-to-value ratio? Well, first you have to take the amount you owe in mortgage payment and divide it with your property’s current value. Afterwards, simply multiply the amount with 100 to receive a percentage. This percentage will come in handy when looking for the rates for which you will be able to get approval for the remortgage loan.
While preparing for applying for the remortgage of your property there are few documents that you need to prepare. Those documents are proof of your house’s address, last previous three months bank statements, latest P60 form, last previous three months salary slips, any proof of recent bonus and of course your Identity card. Remember to keep the original copies for showing to the lender and providing photocopies to them for recording. If your documents are online, then you need to let them go walk through the procedure.