What Do I Need to Remortgage? Step-by-Step Process

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When it comes to remortgaging, there's a lot to consider. As a remortgage will take time to process, you will need to plan in advance to secure the best deal.

In this article, we will be providing you with a step-by-step guide on how remortgaging works, including what do you need to remortgage.

1. Get Ready to Remortgage

The best way get a remortgage, is to plan in advance and give yourself enough time to prepare. There’s a lot to consider, especially when it comes to finding and comparing mortgage deals.

This is why it’s best to plan in advance. This allows you to compare aspects such as fixed rates and standard variable rates (SVR) for each remortgage deal.

Here are some things you’ll need to consider:

Early Repayment Charges or Exit Fees

If you’re looking to leave your mortgage early, this will likely incur early repayment charges or exit fees. This occurs when you’re still legally bound to your contract with the tie-in period. Tie-in periods can vary depending on the mortgage and the lender.

It’s unlikely leaving a mortgage early will be fee-free. The longer you have left on your mortgage contract, the higher the early repayment charges will be.

Our research shows you can expect to pay between 1-5% of the total property value in addition to the deed release. Deed Release fees are around £175.

Solicitor Fees

The average cost of solicitor fees for remortgaging according to our research is £1,078.

If you're looking to remortgage with a new lender, you'll need to enlist the assistance of a remortgage conveyancer or solicitor.

Here are some of the average costs you may expect to pay your solicitor:

Legal Fees

£720 including VAT

Search Fees

£290

Electronic bank transfer fee

£40

Electronic ID check

£20

Title deeds copy

£4

Land Registry fee

£4

Admin Charges and Additional Fees

According to our research, the average remortgage fees are around £3,553.

Some estimated charges you can expect to pay are:

Mortgage arrangement/Product fee (administration charge)

£1,000

Mortgage booking fee (to secure your loan)

£180

Valuation

£770

Mortgage broker/advisor fees (if applicable)

£200

Transfer of equity (for title deed changes)

£570

Unregistered land (for properties not registered with the land registry)

£180

Landlord’s registration (for buy-to-let remortgages)

£100

Management company notice fees (for new ownership/changing lenders)

£300

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2. Look at Remortgage Deals

In most cases, remortgaging can provide you with a better deal for your current financial situation. In the current climate, interest rates are rising and changing. This can affect the types of remortgage deals available.

Remortgage rates can change and the remortgage process takes time. It’s recommended to begin searching for a new mortgage deal around 6 months before you want to remortgage.

3. Find out How Much You Can Borrow

Before you apply for a remortgage, you need to know how much you’re able to borrow. You can work with your mortgage broker to find this out.

A lender will also calculate the amount of money you can borrow through various credit checks. It’s useful to know this beforehand

A mortgage broker and lender will look at your income, the value of the property, equity and the average amount of money you spend.

4. Learn What You Want From A Remortgage

There are many reasons why someone may remortgage, from changing the type of mortgage to releasing equity for home improvements. The reasons behind remortgaging will ultimately have an effect on the type of mortgage you can have.

It’s important to have a clear understanding of these reasons when consulting a mortgage broker. They can advise you on the best type of mortgage for you based on this.

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5. Gather Documents For a Remortgage

There are many documents you need for a remortgage. You'll need to have your current mortgage details including your outstanding mortgage balance, your mortgage terms and details of your monthly remortgage repayments. You will also need:

Bank statements and payslips (at least 3 month’s worth)

3 years of accounts (if you’re self-employed)

Your address for the previous 3 years

Proof of address (most commonly utility bills)

P60 tax form

ID (passport or driving licenses are the most common form of ID used)

Credit card statements (if applicable)

Any subscriptions or outgoings that are regular

Bonus and commission records (if applicable)

Any planning permission documents

6. Hire A Conveyancer or Solicitor

If you’re choosing to stay with your current lender, it’s unlikely you'll need the help of a conveyancing solicitor. This is because the lender will have your current details.

If you’re moving to a new lender, it’s useful to enlist the help of a remortgage conveyancer or solicitor.

The solicitor will handle legal aspects such as the contract, your completion date, checking your ID, and the land registry. They're an important part of the process and will help ensure everything is completed correctly.

Many lenders have their own conveyancers and solicitors, but it can be possible to use your own.

7. Complete Agreement in Principle

A lender will consider your income, the property, and your deposit. Once you have everything you need to begin the remortgage process, you can seek to receive an Agreement in Principle.

While it’s not a guarantee in terms of lending, it provides you with a better idea of who will offer you a remortgage deal.

It’s useful to receive the agreement in principle from the lender you’re interested in remortgaging with. This will help speed up the process. It’s not recommended to have multiple Agreements in Principles.

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8. Remortgage Applications

In general, it’s not recommended to send too many applications. This is because hard searches carried out by lenders can have a negative impact on your credit score.

9. Valuation

When you’ve applied for a mortgage, your lender will carry out a property valuation before agreeing on the remortgage deal. This determines whether they’re happy to lend the specific amount of money requested.

The amount of money they’re willing to lend can be lower than expected. If this is the case you can work with your mortgage broker to discover why the property value may need to be increased.

10. Receive Offers and Complete

If the lender is happy with the valuation and your remortgage application, they will offer you a remortgage deal. Your solicitor will then handle the legal side of this and ensure everything is in order.

The solicitor and conveyancing process times will vary depending on the type of property, and the remortgage offer.

On average, the remortgaging process takes around 4-8 weeks to complete and change to the new mortgage deal.

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What Can Stop You Remortgaging

There are some reasons why you may be denied a remortgage.

Even though you were accepted for your initial mortgage, remortgaging is based on your current financial status. This may have changed since your previous mortgage.

The following aspects are taken into consideration:

Your Credit Score

If you have a good credit score and a positive history of keeping up with monthly repayments, this will put you in good stead for approval.

If you miss payments, especially if they’re mortgage repayments, this will have a significant impact on your ability to be approved.

If your credit score has decreased, it can be possible to make improvements to this over time. You should speak to a financial advisor or mortgage broker to find out the steps you may need to take.

Debt

If you’re in debt, it’s more likely you'll be denied the opportunity to remortgage. This is because lenders will see you as a higher-risk investment.

Income Changes

If you've been made redundant, quit your job, or are on a lower income since your previous mortgage application, this can impact on remortgage opportunities.

It’s unlikely a lender will be willing to lend as much if they think you can’t afford the mortgage repayments.

Given that income doesn’t play a part in your credit score, it may not affect your opportunity to remortgage. However, affordability and income will play a role.

Affordability Concerns

If a lender feels you’re incapable of paying your mortgage repayments, they can be reluctant to approve your application.

This is why it’s important to have your finances in order before you apply for a remortgage. Your outgoings and income are assessed to determine if you’re capable of meeting mortgage repayments.

Missed Payments

If you have a history of missed mortgage repayments on your existing mortgage, this can impact your future opportunities. Lenders will want to approve people that will keep up with repayments.

Each remortgage is a risk for the lender, so they want to ensure they're receiving the payments each month.

High Loan to Value

The value of your property will impact your ability to remortgage. If you have equity in your property, this is helpful.

Lenders will look at your Loan to Value (LTV). If you borrowed a higher amount and now the property has decreased in value, the percentage of the money you have borrowed will be increased.

If the LTV percentage was 80% when you purchased the property, and is now 90%, lenders may not want to lend money at such a high percentage.