This year over one million homeowners on fixed-rate mortgages will be renewing this year or, as new mortgage products come on board, can opt to renew or renegotiate their mortgage terms.

Following the Bank of England interest rate hike on 3^rd August this year, over 1.4 million owners on variable rates* found themselves navigating the challenges of tracker and standard variable rate (SVR) mortgages. Consequently, they experienced an abrupt increase in their monthly mortgage payments. A mere two years ago, the typical two-year fixed-rate mortgage hovered at a comfortable 2.29%. However, in the present landscape, these rates have surged well beyond 6%, fuelling heightened apprehension among both homeowners and prospective sellers.

Remarkably, today, around 86% of all mortgages are firmly rooted in fixed-rate agreements. As a result, those with such arrangements can take solace in the fact that their monthly payments remain steady until the fixed-rate term ultimately concludes.

But for the 1.4 million on variable rates, monthly mortgage rates will have continued to rise. So, what does this mean when it comes to remortgaging?

Understanding Remortgaging

Remortgaging is the process of replacing an existing mortgage with a new one, typically from a different lender and with different terms. The primary motivations for remortgaging include:

Accessing Equity: Homeowners may choose to remortgage to access the equity built up in their homes. This equity can be used for home improvements, debt consolidation, or other financial needs. Rising property values have boosted homeowner equity, encouraging more individuals to tap into their home’s worth through remortgaging, useful finance in a ‘cost of living crisis’. However, this must be done with caution and the right mortgage lending advice from an expert broker or lender.

In this instance there are two options:

• Renew with your existing lender
• Source a new mortgage with a new lender

If you are looking for a new mortgage with a new lender, you will need to seek legal advice.

Switching to Fixed or Variable Rates: Borrowers often remortgage to switch between fixed-rate and variable-rate mortgages based on their financial goals and market conditions. If a current mortgage is coming to an end, homeowners may be forced to remortgage, finding a new product on similar terms to the previous rates in the current market is highly unlikely, but independent brokers will help to assess the best options available in today’s climate. Economic uncertainty will sometimes drive homeowners to secure better finance stability, moving onto a fixed rate will allow homeowners to budget effectively, whilst with the current rates, a variable or tracker rate may be a preferred short-term option.

Securing a Lower Interest Rate: One of the most common reasons for remortgaging is to secure a lower interest rate, which can result in reduced monthly mortgage payments. Given the recent rise in interest rates this is highly unlikely to be a current contributor, but historically, and perhaps in the years ahead, this is something homeowners can look to benefit from once again.

How does the remortgage process work?

Considering the personal financial situation is vital in the remortgage process as well as understanding what happens when a homeowner remortgages.

There are four key steps:

1. Complete an Agreement in Principle – Most lenders will allow an online Agreement in Principle application to see if a lender is willing to lend the amount needed. This helps to understand the options available without choosing a specific deal.
2. Considering the costs – It is important to make sure that a remortgage will result in a better position. Therefore, it is essential to consider costs such as application fees and valuation fees in the process.
3. Applying for a new mortgage – Once the Agreement in Principle has been provided, the mortgage can be applied for. Various personal and financial information will be requested in addition to the details of the current mortgage.
4. Completing a remortgage – The new lender will carry out a credit check and arrange to have the property valued. PLS can help with the transfer of the mortgage and complete the process.

How can PLS Solicitors help with a remortgage?

Remortgaging, as with any mortgage, whether you’re moving or staying in your current home, can be challenging. There is a legal process at the heart of any new mortgage. Some lenders include free legal costs as part of the new mortgage deal.  

However, if you are looking to take a mortgage out with a new lender, you may need to seek your own legal advice. Our dedicated and knowledgeable team of conveyancers are on hand to answer any questions that you might have, and we always encourage our customers to seek out the right financial advice, exploring all options to know the best route for their circumstances.

We will then help you along that journey, to get your remortgage delivered on time.

Buyers, and those remortgaging should make decisions according to their respective personal requirements after taking expert advice.

Get in touch today to see how we can help.

*Source: Guardian, August 2023

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1. Create a Budget and Stick to It:

Start by analysing your income and expenses to create a comprehensive budget. Identify areas where you can cut back on unnecessary spending and redirect those funds towards your savings for the mortgage deposit.

2. Set Up a Dedicated Savings Account:

Open a separate savings account solely for your mortgage deposit. This will help you keep track of your progress and prevent you from dipping into these funds for other expenses.

3. Automate Your Savings:

Arrange automatic transfers from your primary account to your mortgage savings account on payday. This way, you’ll save consistently without the temptation to spend the money elsewhere.

4. Reduce Debt:

High-interest debts, such as credit cards or personal loans, can impede your ability to save. Prioritise paying off these debts to free up more money for your mortgage savings.

5. Cut Down on Unnecessary Expenses:

Evaluate your monthly subscriptions and memberships. Consider cancelling or downgrading those that you can live without, such as streaming services or gym memberships.

6. Opt for the 50/30/20 Rule:

Adopt the 50/30/20 rule, where 50% of your income covers essential expenses, 30% goes to discretionary spending, and the remaining 20% is allocated to savings and debt repayment.

7. Shop Smart:

Take advantage of sales, discounts, and coupons when shopping for groceries, clothing, or household items. Planning your purchases can lead to significant savings over time.

8. Sell Those Unwanted Items:

One person’s trash can be another person’s treasure. If you find yourself surrounded by unwanted items cluttering your home, consider turning them into cash by selling them. Selling unwanted items is not only an excellent way to declutter your space, but it also provides an opportunity to earn extra money to boost your savings for that dream home.

9. Negotiate with Service Providers:

Negotiate with your internet, cable, or insurance providers for better deals. Companies often have promotions or loyalty discounts that you can take advantage of to save money.

10: Seek Professional Advice

Consult with a financial advisor who can help you create a tailored savings strategy and provide insights on how to maximise your efforts. They can also guide you through various savings options and government assistance programs available to first-time homebuyers.

Remember, saving for a mortgage is a journey that requires discipline and commitment. By implementing these top 10 money-saving strategies and staying focused on your goal, you’ll be well on your way to achieving homeownership and turning your dream of owning a house into a reality.

Don’t let the complexities of property transactions overwhelm you. Take the first step towards achieving your property ownership goals with PLS Solicitors. Contact us today and discover how we can make your dream home a reality.

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We want to give you some practical information so that you can plan for your new home move or to go through the process of re-mortgaging.

Here are a few ideas that our customers have found useful:

1. Sourcing the best mortgage deal. There are around 5,000 mortgage lenders in the UK with the largest lenders being Lloyds, Santander, Nationwide, Barclays, NatWest and HSBC. Whether you are looking for support from larger banks or more diverse lenders, it is important you do your research. There are many websites you can find some useful guidance on, these include:

MoneySavingExpert
Which.co.uk
MoneySuperMarket

Given the current climate, it is worth you looking around to ensure you have the most suitable mortgage for you. When doing your research consider if you are locked into your current mortgage for a particular term. If you move home or remortgage during a fixed rate term an additional fee may be payable. 

2. What types of mortgages are available? There are various mortgage types to suit your own individual needs, including variable and fixed-rate mortgages. For variable mortgages, there are generally three types-tracker rate mortgages, discount rate mortgages and standard variable rates. To choose the right one for you, it is important you seek financial guidance on which mortgage is appropriate. Getting conveyancers, like PLS Solicitors, involved in the process early, will help you get one step ahead.

To find the latest information on mortgage rates, you can use a number of mortgage calculators. Here is an example from HM Government.

3. Rising energy and living costs. Rising energy costs have been a concern for many. According to research from the Government Energy Performance Certificate data, buyers of a new build house will save on average around £2,600 per year. This is because new 84% of new build homes are rated with an EPC of B or above. When looking at a new home, whether it is a new build or a re-sale, it is prudent to look at the EPC rating of your new home. In addition, make sure you take time to research and compare energy providers. There are numerous utility companies in the UK and it is wise to check out comparison sites such as MoneySuperMarket or GoCompare.

4. On-costs are often missed. Understanding the total costs of moving or re-mortgaging is important. Transparency of fees from your solicitors, financial advisers and lenders is a legal requirement – check out their website for details on their fees. 

Other third-party costs such as searches and Land Registry fees, must be factored in. Respected conveyancers will give you as much detail on costs upfront.

Your mental health is really important. 

Moving home and re-mortgaging can be a challenging time. If you are anxious at any stage of the legal conveyancing process, our legal advisors are always on hand to help and answer any questions you may have about the legal process.

We are here to help. We have a large team of advisers who are always here for you.

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As the saying goes, home is where the heart is. Our homes offer far more than just physical shelter. They are our safe havens: a treasure trove of memories and possibilities, a place where we can meaningfully and safely connect with family and friends, and our grounding points within the community. 

Sometimes where we live is perfect for where we are now in our lives, but things change and rather than move we may prefer to stay just where we are but make a few changes. This could be extending to create more space for a growing family, a lovely new garden or a fancy new kitchen. Obviously, none of these things are cheap and with the cost of borrowing soaring a remortgage may be the best option to help you stay where you are.

Have you considered a remortgage?

Remortgaging is a smart way to secure a lower repayment deal to reduce your monthly mortgage payment. It is also great if you are looking to borrow a large sum of money at a better rate than a regular loan.

Of course, like all aspects of property law, remortgaging can seem like a complex and stressful undertaking, but our remortgaging legal experts are focused solely on helping our clients move through the process quickly and easily. 

When we support our clients on their property journey, we know that by taking care of the legal aspects of remortgaging their current home we are helping them take the next big step in their lives. 

Helping you love where you live

So, if you are like many people out there who love where they live, and don’t want to move, please get in touch with us today. Our remortgaging specialists will guide you through every step of the process. 

Stay tuned!

Many of the PLS team passionately love where they live. So keep an eye on our blog as we’ll be sharing personal stories from some of our team about their homes throughout the UK and finding out just why they love where they live so much.

To be in with the chance of winning an Amazon Alexa, Ikea Voucher or Bloom and Wild Flowers to make your lovely home even more lovely, take part in our Love Where You Live competition here.

The post Do you Love Where You Live?  appeared first on PLS Solicitors.

We’re open for business as remortgage instructions grow

It feels like only yesterday that we were navigating our way through the Brexit uncertainty, to then come out on the other side in January 2020 with unprecedented levels of new instructions from people looking to either buy, sell or remortgage.

No sooner were we all celebrating that the market had returned to pre-Brexit levels, and then Covid-19 arrived onto the UK shores. There can be no doubt that Covid-19 has brought significant disruption to the UK property market, whilst also generating many discussions on what the future will look like for the property industry.

The demand is still there…

We carried out a recent survey across 1700 existing clients of the firm and 82% of those clients who responded confirmed that they still wanted to proceed with their sale or purchase. There is therefore still the demand amongst existing clients who had instructed us pre Covid-19 and it is also encouraging to hear from estate agents and housebuilders who are reporting that there are extremely high levels of pent up demand from purchasers. This should hopefully support the recovery.  

The remortgage market is looking particularly buoyant and our experience over the past two months confirms that there is still a decent amount of activity in the remortgage market, where appetite seems to be less affected.

This consistency in remortgage applications comes as no surprise as borrowers look to protect themselves by trying to secure a longer deal on a good rate for their largest outgoing, or some may be seeking  to withdraw equity from their property to help them through the months of uncertainty which could lie ahead.

A bit about PLS and our remortgage team

We are a technology based conveyancing specialist, acting nationally for clients and lenders (we are on all mainstream lender panels) across the whole of England and Wales, with offices in Manchester and central London. We utilise a state-of-the-art CRM platform to ensure a slick process from initial instruction to the drawdown of funds.

We have invested heavily in technology and our customers are able to use our PLS Portal 24/7 on desktop and via an IOS/Apple/Android App to track their case and sign their documents at the press of a button on their screen.

Our App has been particularly invaluable for those customers who have been unable to leave their homes due to Covid-19 and who have therefore been able to sign, upload and return all documents without leaving the safety of their own home.

In the past year, we have also incorporated Artificial Intelligence (AI) and Robotic Process Automation (RPA) into our processes with large parts of the process automated without the need for human interaction. This then frees up our fee earners to spend less time on the “admin” and more time guiding our customers who may need any further assistance and a “human touch” along the way.

All of this provides an exceptional technological platform for our remortgage fee earners, who deliver an outstanding service for our clients and their Brokers based on speed, accessibility and transparency, with all work being processed in a secure manner. 

Brokers can also access the PLS Portal 24/7 for updates 

If you are working with borrowers or lenders and are looking for a remortgage specialist firm of solicitors which works on a fixed fee basis, and with strong experience in new homes, shared ownership and Help to Buy, then do please get in touch with our New Business Team on 0330 024 4536

To find out more about our portal click here:
https://portal.pls-solicitors.co.uk/login/ 

What our clients think

At times like this, customer service is tested but since 1st April we have received a high level of five-star reviews. For our remortgage clients, they appreciate the fact they have a dedicated team and that they are responsive and understanding.

Below is one of our latest and outstanding reviews.

Translation: 
“Positive reaction time, quality, professionalism and value”

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