Remortgage Broker adviser

The remortgage process

What is a remortgage?

Remortgaging is the process of taking out a new mortgage loan on a property you already own, to replace your existing mortgage, when it comes to an end. Most mortgage products, including fixed, tracker and discounted rates, have an expiry date, normally 2, 3, 5, 7 or 10 years after your mortgage starts. It is a good idea to check the actual expiry date of your product now – because it isn’t always when you think it is. The remortgage process is usually less involved than buying a new home but you still have to follow the usual eligibility and application process.

Shop around 6-9 months before

Give yourself plenty of time to allow us to find you the best deal. We compare what your current lender is offering with what is available elsewhere. It is possible for us to apply for and secure a new rate 6-7 months before your current deal ends. This means you can move straight across to your new deal when your old one finishes without any disruption. it also means you can secure the best rate as early as possible – and if rates go up or down before the new deal completes we will make sure you benefit either way.

Decide what you are hoping to acheive

Are you simply looking to save money by securing a lower interest rate? Do you want to change the terms of your mortgage to make it more flexible? Or perhaps you want to unlock the equity in your property for home improvements, paying off other debts, a deposit towards another property, a business venture, to gift your family some money or to pay for a wedding, holiday or car?
Think carefully before securing other debts against your home. The overall cost of repayment of other debts might be more when added to your mortgage. Your home might be repossessed if you do not keep up repayments on your mortgage

Submit an application

Once we’ve found you a good deal and you’ve decided that you’re happy to go ahead, it’s then time to apply to the lender for the mortgage. We will send you a Key Facts Illustration (KFI) and agreement in principle for the deal we’ve recommended which sets out all you need to know about the new mortgage, what it costs and what fees are involved. You will be required to provide the usual supporting documentation such as proof of identification, proof of income and details of your outgoings.

How long does a remortgage application take?

It usually takes between four to eight weeks from application to mortgage offer from the lender. Most mortgage offers are valid for 6 months – which is why we can start the remortgage process 6-7 months ahead of your current rate expiring.

Instruct a conveyancing solicitor

Then there’s some legal work to be done – although it is less involved than when purchasing a property. Lenders sometimes offer a free legal service as part of your new deal, but if you need to find one, we can recommend one for you. Your conveyancer will undertake all of the necessary legal work and take the process through to completion by arranging for the funds to be transferred from the new lender to your previous lender. If you are borrowing additional money this will be paid to you on completion.

Reasons to remortgage

Avoid reverting to SVR

If you leave it too late to remortgage, when your current deal expires, you will risk automatically reverting to your current lenders Standard Variable Rate which is often 3-4% higher than a new product we can secure for you via the process of remortgaging.

Get a better rate

The mortgage market is very competitive. Remortgaging is a fantastic opportunity to shop around and look for a better deal. Much like renewing your car insurance – its often more expensive to stay with your existing provider and much better to shop around for a new mortgage deal from whole of market. You may be able to save hundreds, if not thousands by switching your lender or product.

Borrow more / unlock equity

If the value of your property has increased and your initial mortgage balance has decreased that means there is more equity in your home. We can look to unlock this equity for home improvements, paying off others debts, a deposit towards another property, a business venture, to gift your family some money or to pay for a wedding, holiday or car.

Change the term

The mortgage term is the entire length of time the mortgage is set to be paid over (often 25 or 30 years). The shorter the term, the higher the monthly payments, but the quicker the mortgage is paid off and the less interest you pay in total over the lifetime of the mortgage. However, as interest rates have risen lately and your monthly payments will increase significantly, arranging a longer term on your mortgage to reduce your monthly payments may be a very good option right now.

Change the payment type

Mortgages come in repayment and interest-only form. Repayment sees you pay off both the interest and capital amount owed, while the latter only pays the interest. Buy to let mortgages are often interest only but in the world of residential mortgages, it’s uncommon to have an interest-only mortgage. However it is possible if you meet the lenders criteria, and again it could be a good option for you right now if you would like to reduce your monthly mortgage payments.

When do I need to remortgage?

I recommend that you get in touch at least 6-9 months before your existing rate expires. That gives myself and you plenty of time to find the best deal and have your new deal lined up ready to start the day after your existing one expires.