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Your property may be repossessed if you do not keep up repayments on your mortgage.
The Timeframe for Remortgaging
The time it takes to remortgage will depend on whether you remain with your existing lender or move to a new provider. If you stay with your current lender, the process is usually a straightforward product transfer. This often avoids the need for solicitors or changes at the Land Registry, resulting in minimal paperwork and a quicker completion time, which can often be a matter of weeks.
Switching to a new lender involves a more detailed process. This typically includes full underwriting, verification of income and expenditure, and the necessary legal work. Although remortgaging is generally faster than purchasing a property due to reduced conveyancing requirements, timescales can vary depending on the complexity of the application, the quality of documentation provided and the lender’s processing times.
FAQ'S
What is a remortgage and how does it differ from a regular mortgage?
It doesn’t differ, really. If you’re a First Time Buyer you’re getting your first mortgage, where you will choose one of different mortgage types like fixed rate, tracker mortgages or variable rates. At some point they will come to an end, and it’s time to seek another rate.
If you don’t remortgage, you’ll be going onto a much higher rate – the bank’s variable rate. When you remortgage it’s also an opportunity to raise further funds or change things about a bit.
It’s just making sure it still fits your needs. Your first mortgage should be tailored to you in terms of your monthly repayments, your term, the type of mortgage – and when you remortgage, things may have changed.
You may have started a family or got married or changed jobs. You might want to borrow more money, you might want to downsize. There’s lots of different variables really. But it’s basically not your first mortgage, it’s the next one and the one after that – and so on.
How does the process of remortgaging work in the UK?
Your existing lender will write to you when you come to the end of your fixed rate or the end of your tracker. You could have a 30 year term, but only the first two years are fixed at a certain rate.
In the current climate, we’re contacting our clients roughly about six months before, to make sure we’ve got plenty of time to look at all the options for you. Your own lender is only going to offer you what they have. There are many lenders on the market and so it’s important to compare what’s available.
The process of remortgaging is exactly the same as when you get your first mortgage. We’re finding you a new mortgage that suits your income, expenditure and what you want to pay.
You could look at raising more money, increase the term, reduce the term – it’s a refresh. You still have to provide all your documents, you are credit scored again.
A lot of people don’t realise that if they have had a little credit blip since they’ve got the mortgage, they can stay with their current lender and get a new deal. There’s no credit check with this. You don’t have to leave it and go onto the big variable rate, so please bear that in mind.
Costs and Considerations When Remortgaging
While remortgaging offers many advantages, it’s essential to be aware of potential fees and penalties. Some lenders charge product fees, and exiting a current mortgage before the term ends might incur early repayment charges. Brokers can help evaluate the overall costs, comparing options with and without fees to find the most cost-effective deal.
Other considerations include the purpose of the remortgage, such as raising funds or consolidating debts. Borrowers must carefully weigh the long-term impact, especially when converting short-term debt into a long-term mortgage, which could increase overall interest costs.
Overcoming Challenges and Special Circumstances
Remortgaging is possible even in complex situations, such as having bad credit, being self-employed, or nearing retirement age. Subprime lenders may cater to those with adverse credit histories, though at higher interest rates. For the self-employed, lenders often require evidence of consistent income, but options are available for those with as little as one year of self-employment.
Older borrowers can access mortgages tailored to pension income, with some lenders offering terms up to age 85. Mortgage brokers play a critical role in navigating these challenges, leveraging their extensive knowledge of lender criteria to find solutions that meet diverse needs.
Vulnerable Customer
We understand that from time to time our clients may find themselves dealing with circumstances which could mean they are potentially vulnerable. For example, a change in health, caring for a family member or coping with the loss of a loved one. There are many different types of vulnerability, and what makes one person vulnerable might not affect someone else. When we are vulnerable, our need for financial advice may change. However, admitting vulnerability or seeking help can sometimes feel hard.
If this is something you would like to discuss with us, please ask for a copy of our support guide or download a copy here. This guide is designed to help explain vulnerability and the ways in which we might be able to support you. If you feel any of the circumstances in the brochure apply to you, please talk to us.
Your property may be repossessed if you do not keep up repayments on your mortgage.
