The Complete Process to Remortgaging

It may seem complicated at first, but remortgaging can be easily broken down into simple, digestible steps. Here we’ve gone into detail about the complete process to remortgaging.

Decide if remortgaging is for you

If you haven’t yet decided if remortgaging is right for you, our when to remortgage guide is a good place to start.

Remortgaging isn’t the only option if you’re looking to review your mortgage. You can also opt for a mortgage product transfer, where you’ll stay with the same lender and simply change your mortgage product. If you want to know more about which is best for you, read our post on mortgage product transfers vs. remortgaging.

 

Determine how much you want to borrow

Once you’ve confirmed that you want to remortgage, you’ll need to decide how much you want to borrow from your lender.

If you are simply switching mortgages for lower rates, you may only want to borrow the outstanding balance on your existing mortgage. If you’re looking to borrow more money, you need to determine how much equity you have in your home (property value minus outstanding mortgage) and how much of this equity you would like to release. From here you will be able to determine your total desired borrowing amount.

The next step is to determine whether or not this amount is affordable to you. Our affordability calculator can help you work this out.

 

Look at your options

Remortgaging allows you to look beyond your current lender and see what other mortgage options are available to you. At this stage it’s important to review which mortgage product best suits what you’re looking for.

Comparing interest rates between different mortgages is a great place to start. However, make sure to also consider factors such as the mortgage term, the type of mortgage you require – Capital and Interest or Interest Only - and which fees are charged by different lenders. If you are unsure as to the meaning of these terms, read our understanding different types of mortgages guide.

 

Get an Agreement in Principle

A mortgage in principle, or agreement in principle (AIP), is a statement from your lender of how much they’re prepared to lend you ‘in principle’, based on basic information such as your salary, how much you’d like to borrow and your monthly outgoings.

The process for getting a mortgage in principle varies from lender to lender, but is usually fairly straightforward. At Newcastle Building Society our mortgage advisers aim to give you a verbal decision within one hour providing you have all the information at hand that is required. All you have to do is get in touch. Be sure to have the following documents to hand if possible:

  • Details of the property
  • Details of your bank account
  • Proof of your income, such as pay slips, P60, or your accounts if you are self-employed
  • Proof of your outgoings, such as bank statements, and including debts and loans

Read more about AIP in our AIP guide.

 

Apply for your new mortgage

You’ve obtained your agreement in principle, your solicitor has set up all the legalities and you’re ready to go. It’s now time to submit your mortgage application to your new lender.

Before applying, make sure you fully understand all the charges associated with remortgaging with your new lender.

 

Settle on a solicitor

Similar to when you took out the first mortgage on your property, you’ll need a solicitor when remortgaging. Since you are changing lenders, the remortgage isn’t as simple as a product transfer, so a solicitor is necessary to take care of any legal work. Legal costs are sometimes covered by the lender so keep an eye out for this when looking at potential lenders!

 

Have your property valuation

Before a lender confirms the approval of your remortgage application, they might want to carry out several checks, one being a property valuation. It’ll be like the original property valuation that was undertaken when you first purchased the home - the lender will be evaluating the value of the property to determine whether or not to approve your remortgage application.

Property valuation fees and other legal fees are often included on selected products from selected lenders. Depending on the property and the type of valuation you decide to have, these fees can cost several hundred pounds, so any savings that can be made on mortgage fees and charges are incredibly useful.

 

Completion

Once your mortgage has been approved, it’s time for your solicitor to organise a date for completion. This shouldn’t take longer than about 7 days. The funds will then be released by your new lender and your solicitor will use these to settle the outstanding amount on your current mortgage, with any remaining funds – for example, if you have decided to borrow more to complete home improvements - transferred directly to you.

 

What else should I know?

It is important to be fully appraised of the cost of remortgaging. As already mentioned, there are a number of fees and charges you may need to budget for depending on the type of mortgage you take and your personal situation. The types of fees include;

  • Valuation fee
  • Reservation fee
  • Arrangement / completion fee
  • Legal fees

You should also check the terms and conditions of your current mortgage to find out whether there is an early repayment charge and/or an exit fee.

Before making a final decision, obtain a full mortgage redemption cost from your current lender and carefully check your new mortgage illustration, which will include the details of any costs involved.

 

We hope this guide answered all your questions about the process of remortgaging your home. If you have any further questions or would like some advice, please contact one of our expert mortgage advisors.

 

Your mortgage will be secured on your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Thinking about remortgaging?

You can speak to one of our friendly mortgage advisers by calling

03456064488

9am - 5pm Monday to Friday (Calls to 03 numbers, cost the same as a call to a standard ‘01’ or ‘02’ landline number, even when calling from a mobile.)