If you’re looking to remortgage, whether to switch to a better deal or to borrow more money for home improvements, Halifax may be a good option to consider. In this guide, we explore the benefits, process, and considerations when choosing Halifax as your lender.
Benefits of remortgaging to Halifax
Remortgaging to Halifax offers numerous benefits:
- Great Service & Feedback: Halifax is known for its high customer satisfaction and positive reviews, ensuring a smooth and supportive remortgaging experience.
- Wide Choice of Products: They provide a diverse range of mortgage options with competitive rates, catering to different financial situations and goals.
- Inclusive Client Policies: Halifax accommodates a wide range of clients, including self-employed individuals, contractors, CIS workers, and those on zero-hour contracts, making their services accessible to more people.
- Quick Application Process: The remortgaging process is efficient, typically taking 1-2 weeks from application to offer, with occasional same-day offers for urgent needs.
- Free Legals: Clients benefit from no legal costs associated with the remortgaging process, reducing overall expenses.
- Free Valuations: Halifax covers the cost of property valuations, eliminating another upfront fee for clients.
- Product Transfer Service: After the initial product ends, Halifax offers a product transfer service with competitive rates, ensuring clients continue to save money.
- Flexible Options: Clients can make overpayments, take payment holidays, and benefit from mortgage portability, allowing them to manage their mortgage according to their financial situation and goals.
The Halifax remortgage process
The Halifax remortgage process involves several steps to ensure a smooth transition. Here’s a detailed overview:
- Book with a Broker or Advisor: Schedule an appointment with a mortgage broker or advisor to discuss your remortgaging options.
- Research Options: Understand the value of your home by checking online or asking estate agents for a valuation. This helps in calculating the loan-to-value ratio, although the lender will conduct their own valuation.
- Decision Time: Decide if now is the right time to remortgage or if other options like a product transfer, second charge, or waiting for a better time are more suitable. Determine how much you want to borrow, the terms, product type, length, and repayment type.
- Apply for Agreement in Principle (AIP): Run a credit check. If concerned about your credit score, review it beforehand.
- Apply for Full Mortgage: Submit the full mortgage application along with the required paperwork to the lender for assessment and underwriting.
- Instruct Solicitors for Conveyancing: Halifax usually covers the costs of conveyancing, or you can choose your own solicitor at your own expense.
- Mortgage Valuation: Halifax will instruct a third-party surveyor to value the property. This can be a physical valuation, desktop valuation, or automated based on surrounding sales figures. The cost is usually covered by Halifax.
- Mortgage Offer: Typically, Halifax issues a mortgage offer within 1-2 weeks of application, although the timeline can vary.
- Conveyancing Process: This process usually takes 4-8 weeks but can be longer for leasehold properties. You may delay completion to avoid exit penalties if your current fixed rate hasn’t ended yet.
By following these steps, you can ensure a smooth and efficient remortgaging experience with Halifax.
Types of Remortgaging
Halifax offers various types of remortgage options to cater to different needs and financial situations. Here are the main types:
- Like-for-Like Remortgage: Remortgage on the same terms as your existing mortgage, often to secure a better interest rate or more favourable terms.
- Borrow on Same Terms: Remortgage to borrow the same amount as your current mortgage but potentially at a different interest rate or with different terms.
- Overpay Remortgage on Smaller Balance: Remortgage for a smaller balance if you have made overpayments on your existing mortgage, potentially reducing your monthly payments.
- Additional Borrowing: Remortgage to borrow additional funds for purposes such as:
- Home Improvements: Financing renovations or upgrades to your property.
- Debt Consolidation: Consolidating existing debts into your mortgage for simpler management and potentially lower interest rates.
- Purchasing a Car: Using the additional funds to buy a car or other large purchases.
- Transfer of Equity: Remortgage to change the ownership structure of your property, such as:
- Buying Out an Ex-Partner: Remortgaging to remove an ex-partner from the mortgage and property deed.
- Adding a New Partner: Including a new partner in the mortgage and property deed.
- Buying Out Shared Ownership Tranches: Remortgage to buy additional shares in a shared ownership property, increasing your ownership stake.
These remortgage options provide flexibility to suit various personal and financial goals, making it easier to manage your mortgage and achieve your objectives.
When is the right time to re-mortgage?
Deciding when to remortgage involves considering several factors to ensure you make the most financially advantageous decision.
Firstly, timing is crucial, especially when your fixed rate ends. With Halifax, you can secure a new fixed rate up to six months in advance. For instance, if your fixed rate ends in December, applying in June allows you to lock in a rate and hold it until December. This strategy helps avoid exit fees if you’re tied to your current rate until the end of the year while protecting you from potential rate increases. Moreover, if rates drop, Halifax offers the flexibility to switch to the lower rate before your new mortgage starts.
It’s also important to avoid early repayment charges by planning your remortgage to coincide with the end of your current fixed rate. By applying in advance, you can secure a new rate and avoid fees associated with exiting your current deal early. However, if your current deal no longer suits your needs—such as wanting to switch from repayment to interest-only, or requiring an offset mortgage—remortgaging can provide more appropriate terms.
In cases where interest rates have dropped significantly, it may be worthwhile to pay an exit fee to leave your current deal early and secure a better rate. Calculate whether the savings from a lower rate outweigh the costs of exiting your current deal.
How much will Halifax lend on a mortgage?
Halifax typically lends 4.5 to 5 times an individual’s income. For those utilising schemes like Help to Buy or shared ownership, borrowing is limited to 4.5 times their income. High earners, usually those with annual incomes above £75,000 to £100,000, may be able to borrow up to 5.5 times their income. For self-employed individuals, Halifax takes a two-year average of their income to determine the loan amount. Additionally, for those with variable pay, such as bonuses or commissions, Halifax may consider 50-60% of this income when calculating how much to lend. These guidelines ensure that the loan amount is tailored to the borrower’s financial situation.
How long does a Halifax remortgage take?
A Halifax remortgage typically takes 1-2 weeks from application to offer. However, the conveyancing process can take 4-8 weeks, or longer in complex scenarios such as a transfer of equity or repaying a shared equity stake.
To avoid reverting to your existing lender’s standard variable rate, it’s important to allow plenty of time for the remortgage process. For example, if your fixed rate ends in October, you should ideally submit your Halifax remortgage application in August or earlier. While it’s possible to complete the process in less time, allowing extra room for potential delays is advisable. Additionally, leasehold remortgage conveyancing can take longer than freehold conveyancing.
Speak to a re-mortgage expert
Do I need a solicitor to remortgage to Halifax?
Yes, you do need a solicitor to remortgage to Halifax. The solicitor handles several important tasks during the remortgaging process, including:
- Title Deeds: Ensuring the title deeds are correct and in order.
- Mortgage Documentation: Managing the legal paperwork and ensuring all mortgage documents are properly prepared and signed.
- Conveyancing: Overseeing the conveyancing process, including transferring the mortgage from your current lender to Halifax.
- Legal Checks: Performing necessary legal checks to ensure there are no issues with the property that could affect the mortgage.
Halifax usually covers the cost of legal fees for the remortgage process if you use their appointed solicitors. However, if you choose to use your own solicitor, you will be responsible for the costs.
Do I need a survey on a Halifax remortgage?
Yes, you will need a survey when you remortgage to Halifax. The survey is typically provided free of charge by Halifax and can be conducted in one of three ways:
- Physical Valuation: Halifax may instruct e.surv to visit your property and conduct a physical valuation.
- Desktop Valuation: A surveyor may perform a valuation based on comparable properties without visiting the property.
- Automated Valuation: The valuation may be based on data from previous sales of the property or surrounding properties.
The valuation is instructed at the point of your full application to Halifax. This process ensures that the property’s value is accurately assessed for the remortgage.
How can Strive Help?
With vast experience working with Halifax over the years, Strive can aid in your Halifax remortgage process by offering expert advice and guidance. Our experienced mortgage advisors will explain your options and guide you through each step, ensuring you make informed decisions. We help you find the most competitive rates and products offered by Halifax, tailored to your specific financial situation and needs. Staying updated on the latest offers and changes in the mortgage market, we ensure you get the best deal.
Strive supports you throughout the entire application process, from initial inquiry to final approval, ensuring all necessary documentation is complete and submitted correctly to reduce the chances of delays or issues. If you’re concerned about your credit score, we can help you understand your credit report and suggest ways to improve your score before applying for a remortgage, increasing your chances of approval by Halifax.
Halifax Remortgage FAQs
How much can I overpay on my Halifax mortgage?
- You can typically overpay up to 10% of the outstanding mortgage balance per year without incurring any penalties.
What do I do if I’m refused a mortgage by Halifax?
- If Halifax refuses your mortgage application, first ask for the reasons behind the refusal. Review your credit report to identify any issues and consider addressing them. You may also want to consult with a mortgage broker who can help you find alternative lenders or provide advice on improving your eligibility.
What should I do if my property is down-valued?
- If your property is down-valued, consider providing additional evidence of its value, such as recent sales of comparable properties. You can also appeal the valuation or seek a second opinion from another surveyor. If the lower valuation stands, you may need to adjust your borrowing amount or consider alternative mortgage options.
Can I get a Halifax mortgage with bad credit?
- Getting a mortgage with bad credit can be challenging, but it is not impossible. Halifax will consider your overall financial situation, including your credit history, income, and other factors. It may be helpful to consult a mortgage broker who specialises in bad credit mortgages to improve your chances of approval.
Contact us today, and we’ll work hard on your behalf to find you a competitive mortgage.
For more information on mortgages for contractors, please contact a member of the Strive team, by emailing [email protected] or call us on 01273 002697.