The 5 Steps to Remortgaging to Pay for Your Home Improvement

Original article from the HomeOwners Alliance


Remortgaging is the process of transferring your mortgage from one lender to another or staying with the same lender and switching to a different deal.

Big home improvements can cost tens of thousands of pounds, so remortgaging can be a cost-effective way of borrowing the money to pay for them.


Here are the 5 steps to remortgaging and what you need to think about along the way:


1. Shop around

Start by speaking to a mortgage broker. With the fee-free mortgage service provided by L&C you can get expert mortgage advice and let them search over 80 lenders to find you the best deal – all for free. You can start the process over the phone (they’re open until 8pm at night) or online.

L&Cs mortgage experts will be able to crunch the numbers for you to find you the best deal. As part of this they will look at your current mortgage for any penalties for leaving your existing lender to ensure remortgaging makes sense. Start the process here.

2. Decide the best deal for you

The next step is to decide whether you want a variable or fixed rate mortgage and what length of mortgage term (25 years or more?). Take into account any fees that you will need to pay to set up your new mortgage.

3. Apply for the mortgage

When you're remortgaging to release some of the cash that's built up in your property, lenders will ask you why and will want to know if you can afford the new loan. When you submit your application, you will be required to provide proof of identification, income and details of your outgoings. Submitting your application through a mortgage broker is useful as they can help you through the whole process and deal with the lender on your behalf. Read more about how here.

4. Assessing your application

Before agreeing your mortgage, a lender will need to assess your income, financial commitments and outgoings to make sure the mortgage will be affordable. They will also look at your credit rating and carry out a valuation of your property.

5. Offer and Completion

After carrying out all of their checks, the lender will then provide you with a mortgage offer. You will need to appoint a conveyancer for the remortgage process who will undertake all of the necessary legal work and take you through to completion by arranging for the funds to be transferred to your previous lender. The additional money you are borrowing for your home improvements will be paid to you. And you’re one step closer to making your home improvement project a reality!


And finally, depending on your project, it may be that a personal loan is a better option than a remortgage. Big home improvements, such as a loft conversion can cost tens of thousands of pounds so remortgaging can be a cost-effective way of borrowing the money to pay for them


But if you want to borrow comparatively small amounts, an unsecured personal loan is better. The interest rate will be higher and the monthly repayments more, but you'll repay the debt faster. You will also pay less interest overall than if you remortgage. And your house won't be at risk if you default.


Find out more advice on financing your home improvement project

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