Remortgaging is a popular way for homeowners to make the most of their property. It involves replacing an existing mortgage with a new one, often at lower interest rates or better terms. While it can be an effective way to reduce monthly payments and long-term costs, the process can seem daunting and time-consuming. So how long does it take to remortgage?
If you want to make the most of your property and save money in the long term, then remortgage is a great way to do so. The entire remortgaging process can take anywhere from 4-8 weeks, depending on the lender and product chosen.
What is a Remortgage?
A remortgage is a way of switching your current mortgage deal to a new lender, product, or rate. It involves taking out a new loan secured against your property, with the aim of either reducing monthly repayments, releasing capital from the equity in your home, or both.
The remortgage process is similar to applying for a new mortgage. You will complete an application form, provide proof of income and other documents, and your property may be valued by a professional surveyor.
Once approved, you need to pay any costs associated with transferring the loan to the new mortgage lender as well as any Early Repayment Charges or Exit Fees you owe to your existing lender.
1. To reduce interest rates and save money on payment. If interest rates have fallen since you took out your current mortgage or if you have found a better deal on another lender’s mortgage, remortgaging could help you lower your monthly payments.
2. To release cash from equity. If you need some extra funds for home improvements such as extensions, conservatories, or other renovations, remortgaging can be a way of accessing the equity in your home to cover these costs.
3. To switch from variable to fixed rates. Remortgaging offers an opportunity for homeowners to move from variable-rate mortgages to fixed-rate deals, which could offer greater protection against rising interest rates.
4. To reduce the term of the mortgage. If you’ve been making regular overpayments on your current mortgage, remortgaging could help you reduce the overall term of your mortgage and save money on interest payments in the long run.
5. To consolidate debts. Debt consolidation can be a good option for homeowners who have multiple loans or credit cards with high-interest rates. By remortgaging, you could pay off all of these debts with a single loan at a lower interest rate.
How Long Does it Take to Remortgage - Timeline Breakdown
In general, there are 7 steps involved in the remortgage process. The time frame for each step can vary depending on the lender and your specific circumstances, but here’s a rough guide to what you can expect:
Planning and Research (1 - 7 days)
Get a Decision in Principle (1 - 7 days)
Collate your Documents (1 - 3 days)
Submit the Mortgage Application (1 day)
Application Review and Mortgage Offer (7-28 days)
Valuation (1 - 7 days)
Remortgage completion and conveyancing (1 - 7 days)
What Causes Delays During The Remortgage Process?
Remortgaging is quite easy even though it takes time, but there are several factors that can cause delays. These include:
1. Complexity of your mortgage application. The more complex and detailed your mortgage application is, the longer it will take for a lender to complete it. This complexity can arise from a range of things such as your credit history, income, and existing debts. To avoid unnecessary delays, it's important to make sure that all the information you provide is accurate and up-to-date.
2. Problems with your credit report. Your credit report can affect your chances of being accepted for a remortgage, so any issues could cause delays in the process. As part of the remortgaging process, lenders will review your credit report to assess your risk as a borrower. One way to prevent this is to evaluate your credit report before applying and make sure that all the information is accurate.
3. Missing paperwork. If you fail to provide some of the documents or information required for your application, this can cause delays as lenders may need to contact you multiple times in order to get what they require. To avoid this, make sure to double-check each document you have submitted and provide all of the paperwork.
4. Discrepancies with the property valuation. Any discrepancies with property valuation could cause delays in the remortgage process. This typically happens when the property has been significantly changed or renovated without informing the lender. To avoid this, make sure to inform your lender of any changes you have made to the property before applying for a remortgage.
5. If you’ve changed jobs recently. Lenders may need additional evidence if you've recently switched jobs, as they want to make sure that your income is stable enough to support a mortgage repayment plan. This means that lenders may need more documents such as payslips or employer references before they can approve your application.
6. Legal paperwork. When remortgaging, you will usually need to go through the legal process of transferring ownership of your property from one lender to another. This includes obtaining permission from your current lender, preparing various documents and contracts, as well as registering the change with HM Land Registry. All this can take time so it's important to be aware of the process and make sure to allow extra time when remortgaging.
What is the Fastest Way to Remortgage?
While there is no one-size-fits-all answer to this question, the fastest way to remortgage is by
employing a mortgage broker
opting for a product transfer
Using a Mortgage broker
A mortgage broker is a professional who helps individuals and businesses navigate the complex process of applying for a loan or remortgaging a property. These brokers have extensive knowledge of the market and are able to assess borrowers’ needs and provide advice on suitable products that meet their requirements.
Think of them as your personal guide when it comes to searching for a mortgage.
Brokers can help you find a suitable remortgage product quickly and efficiently, as they have access to the best deals on the market. They are also able to negotiate with lenders on your behalf in order to secure favourable terms for you.
This is a good way to quicken the process, as the lender will be more likely to move things along if they have been provided with accurate and complete information by the broker.
Opting for a product transfer
If you're looking for a quick way to remortgage, product transfer is a viable option. Product transfers are when your current lender allows you to transfer your existing mortgage onto a new deal without making any changes to the loan itself.
This means that you don't have to go through the lengthy remortgaging process, as there is no need for lenders to conduct a valuation or reassess your creditworthiness.
The idea of remortgaging can be daunting and it is important to consider all of your options before committing. To help you find if this course of action is for you or not, here are five instances where remortgaging may be beneficial:
If you have an expensive fixed rate. If your current mortgage rate is higher than the market average, then it could be worth remortgaging to a lower rate in order to save money. This will enable you to reduce your monthly payments and potentially save thousands over the course of your loan term.
You want to borrow more money. Depending on the equity you have built up in your property, remortgage can give you access to additional funds for home improvements or other investments.
You are looking for a better deal. Remortgaging could also be beneficial if there’s a better deal available from another lender that offers lower interest rates or more incentives such as cashback offers or free legal fees.
You need to switch from an interest-only to a repayment mortgage. As the name implies, an interest-only mortgage is where only the interest of the loan is paid back each month. This means that you won’t be reducing your debt, and it could be worth remortgaging to a repayment mortgage in order to eliminate the debt over time.
You are nearing the end of your current mortgage term. If you’re close to the end of your mortgage term, it could be beneficial to remortgage in order to secure a better rate or deal and save money on monthly payments.
Preparing to Remortgage
If you've decided to remortgage, then you'll want to make sure that the process is as quick and hassle-free as possible. Here are some tips for preparing to remortgage:
Evaluate your credit score
Get your documents ready
Shop around for deals
Calculate the loan-to-value (LTV) ratio
Decide on the type of remortgage product that suits your needs best
How to Choose The Right Remortgage Deal
Finding the right remortgage deal can be a difficult task, so it’s important to consider all the factors before making a decision:
1. Interest Rates — The interest rate is one of the key elements when it comes to remortgaging, so you should compare different lenders for the best deal.
It determines how much you’ll be paying each month and the total cost of the loan over its lifetime, so it’s important to make sure you’re getting the best rate for your circumstances.
You can look into any introductory offers such as discounted rates for a certain period, as this could save you money in the long term.
2. Fees and Charges — Always read through the small print while signing up for a new mortgage deal as there could be hidden fees or charges which will affect your repayments. You may have to pay set-up fees, legal fees, or even exit fees if you leave the loan early, so consider these costs in your calculations.
3. Flexibility — Different remortgages offer various features, such as the ability to overpay and make lump-sum payments. Consider which are important to you so that you can compare different deals in terms of flexibility and decide on the one which works best for your situation.
4. Early Repayment Charges (ERCs) — If you have an existing mortgage with a lender, there may be clauses that stipulate you to pay an ERC if you terminate the loan before its end date. Make sure to check for this before committing to a particular deal, as it could prove costly.
5. Mortgage Term — The length of the mortgage term is an important factor to take into account when remortgaging, as a longer period could result in lower monthly repayments. However, it’s important to bear in mind that you will be paying interest for a longer period of time, so make sure you can commit to the length of the loan before signing up.
6. Lender Reputation and Reliability — Finally, always check the lender’s reputation and reliability before committing to a new deal. Look at online reviews or speak to people who have taken out a similar product. This will help ensure that you are dealing with trustworthy lenders and getting access to quality customer service throughout your remortgage journey.
The Bottom Line
Remortgaging is a great way to save money on your monthly mortgage repayments and reduce the total cost of the loan. It’s important to compare different deals, check for any fees or charges, consider the length of the loan, and look at the lender’s reputation before signing up.
Doing so can help you find a remortgage deal that suits your needs best and enables you to make significant savings in the long run.
