The UK Remortgage Process: A Guide by Prospect Tree Mortgages
Remortgaging can be a smart financial move, especially as your current mortgage deal comes to an end. Here’s a step-by-step guide to help you navigate the remortgage process with ease.
Your Current Deal is Ending
Most mortgage products come with an introductory rate lasting between 2 to 5 years. As this period concludes, your lender will notify you that you’ll be moved to their Standard Variable Rate (SVR), which is typically higher. This means your monthly repayments are likely to increase unless you take action. Your lender will offer new products to switch to, but this is also a prime opportunity to consider remortgaging with a new lender for potentially better savings.
Find Out How Much You Owe
To start, request a redemption statement from your current lender. This statement details the amount needed to pay off your remaining mortgage, including any fees. This total is what you’ll need to borrow if you decide to remortgage with a new lender.
Find the Best Remortgage Deals
The best way to secure a favourable remortgage deal is through a mortgage broker. We can search the entire UK mortgage market to find the best products suited to your circumstances. Brokers often have access to preferential rates not available on the high street due to the volume of mortgages they place.
Decide on Your Mortgage Product
With your advisor’s guidance, choose between a repayment mortgage or an interest-only mortgage. Interest-only mortgages have lower monthly payments, but you’ll still owe the original loan amount at the end of the term. If you opt for interest-only, ensure you have a repayment strategy, such as selling the property. Your broker can also help you understand other important decisions regarding your mortgage type.
Find a Solicitor (If Moving to a New Lender)
Switching lenders requires you to instruct a solicitor or licensed conveyancer to handle the necessary paperwork, such as signing the mortgage deed and transferring the property title. Some lenders offer ‘free legals’, meaning they’ll appoint a solicitor for you, or provide a ‘cash-back’ option so you can choose your own solicitor.
Organise Your Documents for Affordability and Eligibility Checks
Your new lender will need evidence to support your application. Required documents typically include proof of identity, income, credit situation, and liabilities. Be prepared to organise these documents promptly.
Agreement in Principle
The new lender will issue an Agreement in Principle, indicating how much they’re willing to lend, contingent upon passing affordability and underwriting checks. This agreement isn’t a formal mortgage offer and doesn’t commit either party. If you’re remortgaging to purchase another property, this agreement can strengthen your position with estate agents.
Mortgage Application
Once you’ve chosen a mortgage product and lender, it’s time to apply. Your broker will assist you in completing the application and gathering all necessary evidence to ensure a successful process.
Mortgage Valuation
The lender will conduct a mortgage valuation to assess your property’s value and ensure it provides sufficient security for the loan. This is typically a simple online or desktop valuation.
Mortgage Offer
If your application is successful, the lender will issue a mortgage offer to you and your solicitor. This offer is usually valid for six months. Check the offer carefully for accuracy to avoid delays in receiving funds.
Pay Off Your Old Mortgage
Your solicitor will request the funds from the new lender to pay off your old mortgage.
Register the New Mortgage
Finally, your solicitor will register the new mortgage with the Land Registry. If necessary, they will also update the title deed to reflect the new lender.
By following these steps and working closely with a mortgage broker and solicitor, you can smoothly transition to a new mortgage, potentially saving money and securing a better financial future.
Your home may be repossessed if you do not keep up repayments on your mortgage. the information contained within was correct at the time of publication but is subject to change, 24.06.2024.
How can we help?
As independent Brokers we have real time access to rates as they change. If you just want a quick conversation about what your mortgage may look like in the future or you’ve been putting off moving then we will be happy to help you make an informed decision.
The first step is a conversation with one of our experts.
If you’d like to learn more about mortgage products and how we can help you, please don’t hesitate to get in touch with our team. We’re here to help you navigate the ever-evolving world of mortgages and guide you toward a brighter, greener home.