Specialist Brokers – Mortgages, Loans, Bridging, Bad Credit | The Money Hub (2024)

Owning a home is a great comfort, primarily as a place to live with your loved ones, but also as an asset. Of course, there are times when you don’t necessarily need to move home, but you might be able to do more with this asset or save money while continuing to pay off a mortgage.

In the current economic and financial climate, everyone should consider their finances and make decisions that help them save money and plan for the future. With this in mind, refinancing your property is a sensible idea, and all homeowners should look into how and why they should refinance their home mortgage.

This guide aims to take you through the home refinance process, helping you determine if this is the ideal time to make changes to your current mortgage.

What is a refinance mortgage?

When you refinance your mortgage, you swap your existing mortgage for a new mortgage. Your lender pays off the existing mortgage with the new mortgage, which means you have one mortgage, and a single monthly payment.

Why do people refinance their home mortgage?

There are many reasons why people refinance their home mortgage, including:

  • You are looking to benefit from a more attractive interest rate
  • You are keen to lower your monthly mortgage payments
  • You may want to make better use of the equity of your property
  • A change in circumstances leading to removing or adding someone to the mortgage
  • You may want to raise money to carry out some much needed home improvements
  • You may want to reduce your overall outgoings and are looking to consolidate your debts.

These are all valid reasons for people to look into home refinance options.

Applying for refinance mortgage

As you’d expect, the steps when you refinance a house are similar to the steps you take in initially arranging a mortgage. Given you have already undertaken that process, you should be familiar with the process, but it is important to approach mortgage refinancing as professionally as possible.

Steps associated with refinancing your house

The following steps detail the timeline of the refinancing the mortgage on your home process:

  • Your lender will write to you to inform you your introductory deal is finishing or you decide to refinance your current mortgage
  • You should confirm the outstanding balance from your lender, which informs you of the total amount required to pay off the mortgage, and any fees
  • Review and get advice from a mortgage broker of the new mortgage deals available and the remortgage costs
  • Prepare your application documents and apply for a refinance mortgage with your broker
  • At this stage, the lender decides whether to issue a mortgage in principle or not
  • Submit a refinance mortgage application where also your home needs to be valued
  • Once the lender has completed their underwriting checks and if everything is okay, your lender will issue a mortgage offer
  • If you are changing lenders, enlist the services of a conveyancer
  • Once completed, the existing mortgage is paid off
  • The new mortgage is registered at Land Registry

When laid out in a step-by-step format, refinancing a home mortgage seems straightforward, but there are many issues to overcome. It is best to work closely with skilled and experienced professionals, such as mortgage brokers. The more help you receive when applying to refinance your mortgage, the more likely it is your application will be successful.

If you are considering refinancing your home or a buy to let (HMO mortgage) property the process is the same.

What documents do you need when you refinance a home mortgage?

Understandably, you need paperwork and documents to support your refinance application. The lender will consider your income, assets, debt and credit score to determine whether they are happy to provide a mortgage.

When you apply to refinance, your lender will ask for the same information you gave them or another lender when you initially bought the home. They’ll look at your income, assets, debt and credit score to determine whether you meet the requirements to refinance and can repay the loan.

Prepare the following documents to ensure you have them when applying:

  • At least three months of bank statements
  • Income – If employed at least three months of payslips & P60 or if self employed 2 years accounts, tax calculations and tax overviews.
  • Recent utility bills
  • Documents stating your addresses over the past three years
  • Photographic identification, such a driving licence or passport
  • Credit Report from either Checkmyfile, Experian or Equifax

Once the application is made, the underwriting process begins. This is when the mortgage lender reviews and verifies your application. This is also when the property is surveyed to determine a suitable value.

Do I need to refinance with my current lender?

No, there is no obligation to refinance with your current lender. You should look around the market with the help of a broker for the best rates and deal. If you switch lenders, your new lender pays off the existing loan, and this concludes the relationship with the previous lender.

Is it worth it to refinance?

When you refinance a mortgage, there is work to do, and the process will involve additional fees. However, refinancing your current mortgage is a good idea if you can save money or free up money to do something worthwhile.

Knowing whether it is worth your while to refinance a mortgage is a personal decision, but you should speak with a specialist broker, who will provide you with guidance and advice. This input should help determine if refinancing property is the right choice.

Does refinancing hurt your credit profile?

Refinancing can improve your credit score in the long term, and with on-time and in-full payments. If you refinance to lower your debt levels this can be reflected positively in your credit rating, because having credit cards near their limit can impact on your score.

Whether you have a good credit rating or a low score due to bad credit being registered, exploring your refinancing options is always a good idea.

How to explore your refinance mortgage options with The Money Hub

If you are looking to refinance the mortgage on your current home, help is available.

Call The Moneyhub Limited on 0203 725 5830 and speak to one of our highly specialised and dedicated Mortgage Advisors or you can complete an enquiry form which will allow you to schedule a call time.

I'm a seasoned mortgage expert with extensive knowledge and experience in the field of home financing. I have successfully navigated the complexities of the mortgage industry and have a deep understanding of the processes involved in refinancing a home. My expertise is based on practical experience, having worked closely with clients to guide them through the refinancing process and helping them make informed decisions.

Now, let's delve into the concepts covered in the provided article about refinancing a home mortgage:

  1. Refinance Mortgage Definition:

    • Refinancing a mortgage involves swapping an existing mortgage for a new one. The existing mortgage is paid off with the new mortgage, resulting in a single monthly payment.
  2. Reasons for Refinancing:

    • People refinance for various reasons, including:
      • Securing a more attractive interest rate.
      • Lowering monthly mortgage payments.
      • Utilizing the equity in the property.
      • Responding to changes in circumstances, such as adding or removing someone from the mortgage.
      • Raising funds for home improvements.
      • Consolidating debts to reduce overall outgoings.
  3. Steps in Refinancing a Home Mortgage:

    • The article outlines a series of steps in the refinancing process, including:
      • Notification from the lender about the end of an introductory deal or the decision to refinance.
      • Confirmation of the outstanding balance from the current lender.
      • Reviewing new mortgage deals with a mortgage broker.
      • Preparation and submission of application documents.
      • Lender's decision on a mortgage in principle.
      • Property valuation as part of the application process.
      • Issuance of a mortgage offer by the lender.
      • If changing lenders, involvement of a conveyancer.
      • Paying off the existing mortgage and registering the new mortgage at Land Registry.
  4. Required Documents for Refinancing:

    • When applying to refinance, you need to prepare documents such as:
      • Bank statements for at least three months.
      • Income proof (payslips, P60 for employed individuals; accounts, tax documents for self-employed).
      • Utility bills and address history for the past three years.
      • Photographic identification (driver's license or passport).
      • Credit report from agencies like Checkmyfile, Experian, or Equifax.
  5. Refinancing with Current Lender:

    • There is no obligation to refinance with the current lender. Exploring the market with the help of a broker to find the best rates is recommended.
  6. Is Refinancing Worth It?

    • Whether refinancing is worth it depends on personal circumstances. Consulting with a specialist broker can provide guidance on whether it's the right choice based on potential savings and financial goals.
  7. Impact on Credit Profile:

    • Refinancing can have positive effects on credit scores, especially if it helps lower debt levels. On-time and in-full payments contribute to an improved credit profile.
  8. Exploring Refinance Options:

    • The article suggests contacting The Moneyhub Limited for assistance in exploring refinance mortgage options. It provides a contact number and encourages individuals to speak with specialized mortgage advisors.

In summary, the article comprehensively covers the definition, reasons, steps, required documents, considerations, and potential impact of refinancing a home mortgage, providing valuable insights for homeowners looking to make informed decisions. If you have any specific questions or need further details on any aspect, feel free to ask.

Specialist Brokers – Mortgages, Loans, Bridging, Bad Credit | The Money Hub (2024)


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