A step-by-step guide to remortgaging a property in the United Kingdom

1. Your current deal is about to end

I most cases, you will have taken a mortgage product with an introductory rate which will last between 2 and 5 years. Your current lender will write to you prior to this end date and explain that once it ends, you will be moved onto their SVR (standard variable rate). The SVR is usually always higher than the introductory rate, therefore if you don’t act then you can expect your monthly repayments to rise. Your current lender will offer a range of products which you could move onto, but this is also the time to consider remortgaging to a new lender if there are savings to be made.

2. Find out how much you owe

Once you request it, your lender will provide you with a redemption statement. This will inform you of how much monies are needed to pay off the remainder of the mortgage loan (fees and all). This will be the amount you need to borrow if you decide to remortgage with a new lender.

3. Find the best remortgage deals

The best way to ensure you get the best remortgage deal is by going through a mortgage broker. An independent advisor will be able to search the whole UK mortgage marketplace to find the best remortgage products for your individual circumstances. As they will place many mortgages, they often are given access to preferential rates which you cannot get on the high-street.

4. Decide what type of mortgage product you want

With the help of your advisor, you will need to choose between a repayment or an interest-only mortgage. Interest only mortgages have lower monthly repayments, but when you the mortgage ends you will still owe the same amount of capital. If you decide to go interest-only you must have a repayment vehicle to repay the loan once the mortgage ends, this could be selling the property.

Choosing between interest-only and capital repayment aren’t the only decisions you will need to make, but again, your mortgage broker can fully explain them and help you make the right choice.

5. Find a solicitor (if you’re moving to a new lender)

If you are moving from one lender to another, you will need to instruct a solicitor or licensed conveyancer. Their job is to organise any paperwork required in the process. This includes but is not limited to signing the mortgage deed and transferring the property title.

Some lenders will offer you ‘free legals’ in which case they will instruct a solicitor on your behalf. In most cases, you will also have an option of taking ’cash-back’ instead of ‘free-legals’ which will enable you to find and instruct your own.

6. Affordability and eligibility checks – time to organise your documents

The new lender will require evidence to support your new application. The documents needed will vary between lender and individual, but they will all amount to the same thing.

• Your Identity
• Your income
• Your credit situation
• Your Liabilities

7. Agreement in Principle

The new lender will produce an Agreement in Principle which will indicate how much they would be willing to lend you in writing. This agreement is on the basis that you pass all the required affordability and underwriting checks, which will involve the lender scrutinizing your documents and running their own credit checks. The agreement in principle is not a formal mortgage offer and doesn’t constitute a commitment from either the lender or yourself.

If you are remortgaging your current property to purchase another, this agreement will add weight to your position when speaking to estate agents and requesting property viewings.

8. Mortgage Application

Once you have decided which product you want from which lender, it’s time to apply for your remortgage. Your broker will guide you through the application process and help you collate all of the evidence you need to ensure your application is a success.

9. Mortgage Valuation

Once you have applied for your remortgage, the lender will organise a mortgage valuation to assess the property and confirm whether it is sufficient security (collateral) for the loan. This valuation is simply to answer this question and doesn’t replace a traditional survey and often it’s done online. Online valuations will sometimes be referred to as a desktop valuation.

10. Mortgage Offer

If your application is approved, then the lender will send you and your solicitor a mortgage offer. Mortgage offers typically last for six months, but it’s important to take note of the offer expiry date in case it is different.

Also check the offer thoroughly to ensure the rest of the information is correct. Incorrect information on a mortgage offer could delay you receiving funds, so this is especially important.

11. Pay off your old mortgage

The solicitor helping you with this transaction will now request funds from the new lender and use these to pay off the old lender.

12. Register the new mortgage

Your chosen solicitor will now register the mortgage holders details with the Land Registry and where necessary, the title deed will be transferred to the new lender.

Need mortgage advice?

Whilst shopping around for mortgages, my partner and I came across Prospect Tree, Phil and the guys have been amazing through the whole process not just with finding the best mortgage but helping with all the life insurance and other bits that come with it. They have dealt with everything leaving us stress-free. So thankful for finding them and grateful for their help! 100% recommend.

Reviews.io