If you’re considering remortgaging, then you’ve come to the right place. In this article, we will break down and explain the remortgaging process.
What does remortgaging mean?
Remortgaging or a remortgage is a process in which you, as a property owner, choose to renew your mortgage. This may happen when you’re approaching the end of your current mortgage deal, or if you’re shopping around for a better deal. When remortgaging, depending on what deals are available to you, you may choose to remortgage with your current lender or choose a new lender.
Your mortgage lender will get in touch when you’re nearing the end of your current mortgage deal. Additionally, your mortgage adviser may contact you, too, to help you find the best mortgage deal for you.
What’s the difference between remortgaging and a product transfer?
A remortgage is when you switch your existing mortgage to a new lender, whereas a product transfer is when you stick with your current lender but switch to a different mortgage deal.
When remortgaging, you apply for a mortgage with a new lender, which typically involves more paperwork, and you might be able to borrow more money if your home’s value has increased. A product transfer is often quicker than a remortgage, as you stay with your current lender and simply switch mortgage product or rate. However, with a product transfer, you typically can’t borrow more money.
How does remortgaging work?
The remortgaging process is very similar to when you initially took out your mortgage. To remortgage your property, key steps include:
Step 1: Your remortgage needs
Consider your needs and requirements, as well as any costs involved in remortgaging. In most cases, these will include:
- Lender arrangement fee - paid to the lender for arranging your remortgage
- Booking or reservation fee - usually charged upfront, it reserves the mortgage product offered while your remortgage application is being processed
- Valuation fee - pays for an up-to-date valuation to be carried out on the property
- Survey fee - pays for an up-to-date survey carried out on the property
- Legal fee - costs incurred by your conveyancer for the legal work required for a remortgage
- Broker arrangement fee - a one-off fee payable to us, for lifetime membership to our mortgage services, which comes with a number of benefits. If you are already a lifetime member, this fee will not be payable
- Administration fee - payable to your mortgage broker for each application for handling all the administration on existing and future remortgage applications
Please note that this may not be the complete list of fees that could apply when remortgaging.
Step 2: Your protection needs
It’s important to have the appropriate insurance in place to protect you and your home. This could include buildings and contents insurance, as well as life insurance policies.
Speak to your mortgage consultant to discuss any new or pre-existing protection products.
Step 3: Finding the best mortgage deal
You might be wondering about how to find the best remortgage deal. This can be done through researching the market, and talking to mortgage brokers who can offer you insight into current mortgage deals that suit your circumstances. They may even have access to remortgage deals that you may not find anywhere else or can advise if a product transfer (where you switch from one mortgage product to another with the same lender) is more suitable
Similar to your previous mortgage, getting an agreement in principle (AIP) offers you insight into how much you could borrow. Although an AIP is not a formal agreement, it can make the remortgage process easier.
Once you’ve found the deal that’s right for you, your mortgage consultant will submit your formal application.
Step 4: Remortgage valuation
Your lender will arrange a valuation on your property to determine the property’s value. The lender’s valuation may be a full valuation by a surveyor, but could be a drive-by valuation when the valuer inspects from the road or even an automated desktop valuation.
You may then also want to undertake a RICS survey (level two or three) to assess the overall condition of your property and identify improvements or repairs that might need to be made. The surveyor can also provide you with their professional opinion of your property’s market value.
Depending on if the value of your home has changed since your original mortgage, you may find you are in a different loan-to value (LTV) band, which could give you access to different rates.
Step 5: Remortgage offer
Your remortgage offer will be issued, subject to terms and conditions.
Step 6: Final checks
Your mortgage broker or independent financial adviser will review your remortgage offer and legal paperwork. This is an important step, where you need to make sure that what’s being submitted is accurate to avoid delays or additional costs to correct mistakes.
Step 7: Completion/Conclusion of Missives
Once your remortgage application is sent off, it can take anywhere between 4 and 8 weeks to complete. Your mortgage adviser will be able to offer you more insight into this process and guide you along the way.
Can I keep remortgaging?
Yes, you can keep remortgaging, however, it’s typically best to do it when your current mortgage deal is ending — your mortgage broker will most probably be in touch to help you remortgage your property at the right time. Continuously remortgaging while you are tied into a fixed term deal can result in early repayment charges. Most people remortgage every few years when their fixed or discounted period ends.
Who is eligible for remortgaging?
Anyone who already has a mortgage can potentially remortgage. Keep in mind that remortgage applications still involve affordability checks, so changes in your circumstances like your income, living costs and credit score will be considered.
What do I need to remortgage?
Each lender is different and will require different information, however, you can assume that you will need to provide documentation including:
- Proof of income (payslips, bank statements, accounts if self-employed)
- Proof of identity
- Proof of address
- Details of your current mortgage
- Property information (address, estimated value)
Want more personalised information? Get in touch with our mortgage advisers today. They’ll be able to assist you with your mortgage needs and help you find the best deal for you.
