Remortgaging is a normal part of having a mortgage - but it can feel a little overwhelming if you haven't done it before.
So how long does it take to remortgage? Are there any tips for getting through the process? How do you get the best new mortgage deal? And does it take any longer to remortgage and release equity?
It usually takes four to eight weeks to remortgage, but it can be much longer or shorter depending on your choice of lender, broker, and your individual circumstances.
Borrowers are encouraged to start the remortgage process at least six months before the end of their current fixed package. This ensures they have enough time to find a suitable package, and gives their lenders enough time to prepare the paperwork.
While the bulk of the remortgaging work is usually complete several months before the end of the six month period, you need to wait for your mortgage to be transferred to your new lender - and this can only be done on the final day of your current agreement. So, while it typically takes four to eight weeks to remortgage, the process can feel much longer.
For example: a borrower - with six months until the end of their fixed rate - decides to start shopping around for a new mortgage. They enlist the help of a broker, who finds them a good deal. The resulting paperwork takes six weeks to sign.
On paper, the remortgaging process isn't over, but the borrower's role in it is. With just over four and a half months left until their current package expires, the borrower has secured a new deal, ready to transfer once their fixed rate concludes.
No! You can remortgage early and transfer your mortgage to a new lender - but you'll almost certainly incur Early Repayment Charges (ERC), and if you haven't got a good amount of equity built up in your home, this can make the process very expensive indeed.
When you take out a mortgage with a lender, you make an agreement to pay back your loan, with a certain amount of interest, for a specific period of time. Monthly repayments - with interest - are how lenders make money from borrowers. By remortgaging before the end of your fixed period, you prevent them from making any gain from you at all - hence ERCs.
ERCs are a percentage of your outstanding loan, charged against the borrower upon their remortgaging before the end of the fixed rate.
For example: A borrower takes out a five year fixed rate (4%) mortgage of £225,000 to buy a house worth £250,000. They make monthly payments for four years, but then decide to remortgage a year early. Maybe they spotted a better deal due to falling interest rates.
Sadly, because the borrower agreed to stay with the lender for five years, they've breached the terms of their contract and now must pay a percentage of the outstanding loan. This could be anything from two to five per cent - a whopping £4000 - £11,0000 charge on top of standard remortgage fees.
The process of releasing equity with a remortgage is longer than a regular application because it requires a little more work. A typical remortgage involves a valuation from a lender, and some affordability checks. This can take six to eight weeks depending on your lender, broker, and individual circumstances.
Remortgaging to release equity requires an additional process of assessing how much equity you can release, and what the terms of the equity release are. This involves a separate valuation of your home, and an eligibility check for your equity release.
These additional procedures for an equity release can add anything from a few weeks, to a few months to your remortgaging process.
To speed up the process of releasing equity, it pays to be prepared. Calculate how much equity you have in your property - the difference between the value of your property and the amount you still owe on your mortgage.
Once you know how much equity you have, you'll need to apply for a new mortgage deal that allows you to release this equity. This can take longer than a regular mortgage application, as lenders may require additional documentation and may need to assess the value of your property more thoroughly.
You can usually borrow up to 90% of your property's value, but this depends on your lender and your individual circumstances.
Instructing a mortgage broker to help with finding a suitable package might also improve the speed and efficiency of remortgaging.
Yes, it can be quicker and easier to remortgage with your current lender. The underwriters are familiar with the details of your current loan and property. As such, you may not have to pass as many checks for them to justify your application.
If you're happy with your current lender and the terms of your mortgage, it may be quicker and easier to stay with them and simply switch to a new deal. However, if you're not satisfied with your current interest rate or terms, you may want to consider switching to a new mortgage lender to get a better deal.
Another factor to consider is the amount of equity you've got in your property. If you're looking to release equity, your current lender may not be able to offer you the best deal, and you may need to switch to a new lender to get the amount of funding you need.
When it comes to remortgaging, always shop around and compare deals from different lenders - regardless of whether you're considering switching or staying with your current lender. This can help you find the best possible deal for your circumstances and ensure that you're getting the most competitive interest rate and terms.
Yes! Hiring a broker is a great idea if you're thinking of remortgaging. Experienced brokers can make the process quicker, more efficient, and ultimately, more lucrative.
Two years, five years, twenty years - a mortgage can have you locked into a financial arrangement with a bank for a long, long time. Consulting an experienced mortgage broker can help you make this arrangement count.
A mortgage broker is a professional who can help you find and compare mortgage deals from different lenders, and can provide guidance and advice on which deal is best for you.
Remember: Brokers are useful, but your own research and due-diligence matters. Shop around to ensure that you're getting the best possible deal, even if you're thinking of hiring a broker.
You have two options - comparing deals online using websites like Comparethemarket.com and GoCompare, or hiring a mortgage broker. We recommend both.
There's no harm in scouting about on your end and learning what you can about the market - but a good broker will often make the difference. Mortgage brokers know how different banks and building societies work, and which are more likely to accept your offer based on requirements.
Yes, some lenders are better than others - more specifically, some banks and building societies may be better suited to your individual circumstances, and the requirements of mortgaging your particular home. Although many parts of the mortgage process are similar across lenders, there are some differences that can affect the fees you're charged, and the services you receive.
It's worth taking the time to consider your options when it comes to remortgaging, especially if your personal circumstances have changed. A change in career, or income, can affect your options significantly.
All in all, mortgages can be a stressful business - especially if interest rates are changing rapidly. Evaluating your potential for repayments, along with your future goals, will go a long way in helping you make your decision.
Remortgaging is usually pretty straightforward. It follows a similar process to your first mortgage application, albeit a little smoother, especially if you remain with the same lender.
However, the process can become difficult if your credit rating has deteriorated, or if you've missed payments. If you've proven to be a problematic borrower, lenders are less likely to give you good rates, or even take on your mortgage
Depending on your individual circumstances and finances, a remortgage with the same bank can take anywhere from a few days to a month. The underwriters already have your information to hand, allowing for quicker checks and confirmations.
However, if your circumstances have changed (you've fallen into mortgage arrears, or have experienced a change in income), the process will likely take longer, as your lender will need to reassess your affordability.
Picking the right estate agent is vital for a successful sale. GetAgent makes choosing simple. Discover the best performing agents in your area.
Picking the right estate agent is vital for a successful sale. GetAgent makes choosing simple. Discover the best performing agents in your area.
It takes 2 minutes.
We are a company registered in England & Wales, company number 09428979.
Copyright © 2024 GetAgent Limited