Remortgaging for Dummies!
Discussion
Hi
We've just bought our first house and being a man, I'm already thinking two years down the line about remortgage time! Can someone just check I'm understanding the remortgage process correctly and fill in any blanks?
So, we paid £240k for our house with a 5% deposit, so mortgage of £228k. We really want to be at 90% LTV by the time we remortgage - hopefully we can do that through equity and not have to stump up additional capital.
I don't have the figures in front of me but let's just say outstanding mortgage balance in two years time is £220k.
If the house is still worth £240k in 2 years time when it comes to remortgage, we would have a "deposit" for the remortgage of £24k, is that right? (10% of £240k). Therefore we could borrow £216k and would need to stump up £4k in cash to top up the £216k of mortgage to the £220k required to pay off our 95% mortgage?
Similarly if the house prices rise and our house is worth £250k in two years time, our LTV would be 88% (£220k/£250k) and therefore wouldn't need to put down any additional capital?
OK, so then in terms of determining the value, what happens? Is it the same as when you buy? You approach a lender (either yourself of through a broker) and they will conduct a mortgage valuation to see how much your existing property is worth? Do solicitors get involved at all during the remortgage process (dear lord I hope not) or do you only deal with lenders/brokers?
Thanks for any clarification you can provide!
We've just bought our first house and being a man, I'm already thinking two years down the line about remortgage time! Can someone just check I'm understanding the remortgage process correctly and fill in any blanks?
So, we paid £240k for our house with a 5% deposit, so mortgage of £228k. We really want to be at 90% LTV by the time we remortgage - hopefully we can do that through equity and not have to stump up additional capital.
I don't have the figures in front of me but let's just say outstanding mortgage balance in two years time is £220k.
If the house is still worth £240k in 2 years time when it comes to remortgage, we would have a "deposit" for the remortgage of £24k, is that right? (10% of £240k). Therefore we could borrow £216k and would need to stump up £4k in cash to top up the £216k of mortgage to the £220k required to pay off our 95% mortgage?
Similarly if the house prices rise and our house is worth £250k in two years time, our LTV would be 88% (£220k/£250k) and therefore wouldn't need to put down any additional capital?
OK, so then in terms of determining the value, what happens? Is it the same as when you buy? You approach a lender (either yourself of through a broker) and they will conduct a mortgage valuation to see how much your existing property is worth? Do solicitors get involved at all during the remortgage process (dear lord I hope not) or do you only deal with lenders/brokers?
Thanks for any clarification you can provide!
F3RNY7 said:
Thanks Sarnie! You have all my details anyway :-)
At what point does it pay to be kicking the process off? I think our 2 year introductory period ends in May-17 - how long before that should we be getting in touch?
90 days before is when we contact clients as remortgage Offers generally last three months At what point does it pay to be kicking the process off? I think our 2 year introductory period ends in May-17 - how long before that should we be getting in touch?
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