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Remortgaging success during COVID-19

October 20, 2020

Are people moving house or staying and improving in these coronavirus times? There’s evidence of both and remortgaging appears a popular way of funding both options. But is now the best time to remortgage? And how do you find the best deal? We’ve asked the consumer advice website HomeOwners Alliance what to do next.

Being in lockdown has made millions of homeowners re-evaluate their current living conditions. A recent survey by NatWest found that while home improvements are traditionally the reason for one in every five remortgage applications, three times as many homeowners (62%) would now consider remortgaging for this purpose.Remortgaging working though finances

For those who think their current home no longer gives them what they need, then moving home might be the answer. If you think coronavirus has put people off moving, then you’d be wrong. The housing market has recovered since lockdown with strong activity and growing house prices. This has been fuelled by a release in pent up demand and the time-limited stamp duty holiday that could save homebuyers thousands in tax.

Is now the best time to remortgage?

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.

First-time buyers have been struggling during the pandemic as low-deposit products are pulled from the market. But if you are a homeowner with equity in your home and a track record of paying your mortgage, the picture is rosier.Remortgaging success during COVID-19

According to conveyancing provider LMS, of the remortgages that did take place in August 2020, around half managed to get a new deal paying on average £200 less per month, while 42% increased the size of their loan – and many of these are likely to be freeing up capital to fund home improvements.

How do I find the best remortgage?

1.Check the value of your home

Before you look at the best mortgage rates on offer, you need to know the value of your home. If your home has gone up in value since you bought it, either due to local house price inflation or because you’ve done substantial work, then it may be worth more. You can get an estimate now by using our free instant home valuation tool or by speaking to a local estate agent. Your valuation needs to be realistic as when you apply for a mortgage, and the lender will send out an independent valuer to confirm the figure.Remortgaging planning

2. Get an idea of the best rates

Mortgage rates are the rate of interest charged by a bank or building society. The interest is charged by the lender as compensation for the money they lend you. To find the best deal for you that’s currently on offer, take a look at our Best Mortgage Rates page.

3. Use a mortgage broker

Finding the best mortgage rates in a sea of mortgage deals is hard work. And in the current coronavirus climate, lenders are continually altering their rates and products. There is also a growing trend for mortgage flash sales, where products are only available for a few days. So we recommend using a fee-free mortgage broker who can do the leg work for you. As the furlough scheme ends, be ready for lenders to ask for payslips to demonstrate the return to previous income levels. You can start the process online or on the phone here with our calculators and online application process with our partners at L&C.

For more information on all aspects of buying selling and improving a home visit hoa.org.uk. For more information on whether to remortgage, costs and what to watch out for, see our guide on How to Remortgage.

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