In this blog, we'll look at each step involved in the remortgage process from start to finish to give you an understanding of what's in store.
Step 1 - Talk to a mortgage adviser
When it comes to remortgaging, getting good quality advice is crucial.
Not only does it mean you'll get the best deal on the market, it also gives you support and advice from an expert completely specific to your situation, which will make the process as smooth as it possibly can be.
Talk to your mortgage adviser about what you want to achieve and why you're considering a remortgage, they'll talk you through what options are available to you, whether a remortgage is the right thing for you or whether there's an alternative option that better suits your needs.
Once you've got a plan to go ahead with, your adviser will be able to compare hundreds of mortgage products to find you the lowest rate.
Tip: Make sure your mortgage adviser is whole of market, meaning they have access to all products rather than those from a select few lenders.
Step 2 - Finding and applying for your mortgage product
Once you've had your first chat with a mortgage adviser and established what route you're going to go down, they'll find you the best deal and get ready to submit an application for you.
In order to submit an application, the lender needs to see some documents from you.
This is to make sure you are who you say you are and to make sure everything your adviser is telling them about you checks out.
Each lender has different requirements for document checks, but a typical list would include things like:
- Proof of ID (Passport, drivers licence)
- Proof of address (Utility or credit card bills)
- 3 months payslips
- 3 months bank statements
- If you're self employed - your company accounts / tax returns
- Proof of additional income (Bonuses, commission etc.)
Once your adviser has completed the document pack, they'll submit your application to the chosen lender for assessment.
Step 3 - Mortgage lender assessment
When your lender has got your documents, they'll make an assessment of the case and decide whether they want to lend you the money you're asking for.
Providing everything's okay, they'll then instruct a valuation of your home to find out exactly what it's worth.
Some lenders offer a free valuation as part of the product and others you'll have to pay for yourself.
Your valuation is important because it helps determine your so-called Loan to Value ratio, this basically means how much you're trying to borrow in relation to the value of your home.
Loan to Value is what lenders use to group their interest rates. Generally, the lower the Loan to Value, the better the interest rate.
Step 4 - Mortgage approval and offer
Once your lender is happy with the application you've submitted to them, they'll produce a mortgage offer.
This document basically sets out what they're willing to lend and any conditions of the loan.
By this time, you'll have a solicitor acting for you to cover the legal work involved, you can ask your mortgage adviser to recommend someone or find a suitable property solicitor yourself.
Once you've got the mortgage offer, your solicitor will start working with your new lender to finalise the deal and your old lender to settle your current mortgage.
Similar to the free valuation we mentioned earlier, some mortgage lenders offer a free solicitors package as an incentive to use their service and others you'll have to pay for.
Step 5 - Completion
Once your solicitor has worked through all the necessary legalities of the deal with your current and new lenders, they'll set a date for completion.
On this date the new bank will send the agreed loan amount over to your solicitor and they will redeem your existing mortgage.
They'll provide you with a completion statement and your remortgage will be all done.
If you're remortgaging to raise extra cash for any reason, this will also be done on completion day, your solicitor will send the money due to you to your preferred bank account.
That's the remortgage process in a nutshell, the time it takes to go through the process varies from person to person, but typically 4-8 weeks should do it.
If you're considering a remortgage for any reason, remember these tips for a smooth process:
- Be ready with your documents
- Speak to a good quality mortgage adviser early on
- Check your credit early and fix anything that isn't right
- Don't put it off