Once you have purchased a property and you’ve moved in, it’s easy to forget about your initial mortgage deal. We explore the remortgage process, what you need to check before you begin and how to remortgage your home.
Before you Remortgage
1. Check when your deal expires
Your mortgage offer will remind you when your current deal expires. However, the date on your mortgage offer can sometimes be an assumption based on the anticipated completion date. So it’s always best to recall your actual completion date from the solicitor/lender and then work out the period from here.
2. Check for Early Repayment Charges
The next step is to check for Early Repayment Charges or other costs/fees involved before you remortgage your home. If you are in a fixed deal for example, fees/charges can apply until the fixed period ends (or even beyond). You don’t need to wait until the fixed period ends before you line up a new deal, but within 3 months is the recommended period to start looking and to secure a new mortgage offer.
3. Does your lender offer a mortgage to switch to?
Check your existing lender deals first, they might not always have the best deal but its worth taking a look on their website. You need to be looking at remortgage switch rates or checking that the mortgages you are looking at aren’t for First Time Buyers or Home Movers.
4. Use a mortgage broker to search the market for you
Once you have checked your existing lender deals you should check with a whole of market, independent and fee-free mortgage broker. A mortgage broker will also be able to work out the anticipated loan to value, this is key when determining the most suitable mortgage. A good mortgage broker will do some research into your property value to see if you could be eligible for lower loan to value deals.
The Remortgage Process
1. Request a redemption figure from your current mortgage lender
This will detail any Early Repayment Charges or other costs associated with redeeming your mortgage. The redemption figure will detail the total cost including your current balance to remortgage. Be aware though that this figure will change based on when your interest is calculated.
2. Decide whether you want to use the new lender’s legal service
You will need a solicitor or conveyancer for the remortgage process when moving to a new lender. When remortgaging, lenders will offer their own in-house services and they may offer this for free. Alternatively, many mortgage lenders advertise the same mortgage deal but with cash back instead of free legals. The cash back is typically around £500 and is designed to be used towards your own conveyancing costs. Typically, the lender conveyancers do the job well but can be slow sometimes and they will often need to be chased up. If you use a mortgage broker they will often chase them for you and help manage the process.
3. Choose a mortgage deal and apply for your remortgage
Choose a deal either through a broker or by doing your own research and going direct to lender. To apply for your remortgage and submit an application you will need to provide proof of income again. For example, payslips/P60 if employed or SA302’s / tax return or Company accounts if self-employed. Some lenders will ask for more documentation than others. The process will often involve either a desktop valuation or a surveyor will be called out to visit your home. Once the survey on your home is complete and acceptable and the lender is satisfied with all of your documentation they should then offer your remortgage.
How long does the remortgage process take from start to finish?
This will depend on the lender and the process followed, for example if no physical inspection of your home is required and they only need your latest payslips we have seen a remortgage offer on the very same day the remortgage is applied for. The average timescale is between 7-10 days for a mortgage offer and about 30 days to completion. This is why we recommend contacting us to begin the process at least 30 days before your current deal expires.
Author: Ben, Glow Mortgage Advisor (CeMAP, BSc Hons)
Date Published: 9th April 2019
This article is a blog post opinion and does not constitute personal advice or recommendation.