Remortgaging Query - Deposit

TheGame21

Just in the process of getting our first mortgage at the moment (you may have seen other threads:o). I've got a query concerning remortgaging after the fixed period. How is the deposit raised when all your money is tied up in the property if you wish to remortgage? Do you have to take extra equity out of the property?

MajorTom_2

Your deposit is the current value of the property. When it comes to remortgage the property will be revalued.
This is why so many people are stuck on lenders SVRs, their property value has dropped and they don't have enough deposit in the value of the property, not without putting extra hard cash in first.

MT

holly_hobby

Yep, with a remortgage application, the deposit is the equivilent between the value of the property and the reqd mortgage.

Hope this helps

Holly

TheGame21

Is the required mortgage, the total amount to be paid back or amount borrowed remaining? Could you provide an example?

holly_hobby

Your reqd mortgage, is the amount you want to borrow from the lender .....

ie .....

You currently owe 150k on your mortgage with ABC Bank, your house is valued at 200k.

You decide you want to remortgage to XYZ Bank because you like the look of their 2 yr fixed ......

Your application to XYZ bank is for a mortgage of 150k (ie the amount reqd to repay ABC Bank and move your borrowings), on a property valuation of 200k ....

Hope this helps

Holly

TheGame21

Thanks, so on the above example, the deposit would be 25%. Would all the surveys/solicitor fees be need to be paid again?

holly_hobby

Typically yes - although there are several lenders whom offer "fee free remortgage" products - although you will find that the payrate isn't as competitive as those products where you have to pay your own legal/survey/product fee. So you would best to compare like for like, and what the total cost of borrowing will be over the same term, between the product with no fees and the product with fees - to see what is actually the most competitive product. (your adviser will do this for you).

Just to be clear, the "fee free" elements releates to basic legals (essentially just checking of title and tsf of charge) and a basic survey.

Hope this helps

Holly