How to remortgage: a step-by-step guide
Mortgages are long-term commitments but you don’t have to stick with the same product for the whole term of the loan. Remortgaging is the process of switching what you owe on your existing mortgage into a new mortgage product – that might be with your current lender, or a different bank or building society altogether. Our step-by-step guide below explains the process.
1. Think about why you want to remortgage
Many people remortgage in order to cut the cost of monthly repayments, particularly when they come to the end of a short-term deal. But there are other reasons to consider remortgaging: to switch from a standard variable rate to a fixed or capped rate to get certainty of repayments; to switch to a more flexible mortgage; or to release equity in your property if it has risen in value.
2. Speak to an independent mortgage adviser
A mortgage adviser will be able to work out whether remortgaging will save you money. An independent, whole of market broker is not tied to a particular lender and will be able to compare a wide range of deals. Taking advice when remortgaging makes sense, as an expert will help you find the best deals in the market and advise you on how much you stand to save.
At Which? Mortgage Advisers our expert advisers will search the whole of the market for you, taking penalties and fees into consideration when comparing and recommending mortgage deals. We’ll also tell you about direct deals in the market, even if it means bypassing us completely. We look at the whole package, not just the rate, to ensure that we recommend the deal that best suits your individual circumstances.
If you would like to do the sums yourself, make sure you take all charges – such as any exit penalties levied by your current lender, arrangement fees and valuation fees on the new deal – into consideration. You’ll need to add up the monthly repayments proposed on your new mortgage over the term of the deal and compare them to the total repayments due on your current mortgage product over the same period.
3. Consider affordability
Bear in mind that cheapest doesn’t always mean best; think about what suits your circumstances. If, for example, you would be unable to afford the repayments in the event of the mortgage interest rate rising, look for a fixed-rate product that offers certainty about what you’ll pay.
4. Approach your current lender
Once you’ve found a new mortgage deal, it’s worth giving your current lender a chance to match the terms, even if its advertised products are inferior. It may be keen to fight to keep your business. At Which? Mortgage Advisers we’ll let you know if your current bank or another lender is offering a remortgage deal with a lower rate, even if it means you go direct to that lender.
5. Make the application
When you’ve made a final decision about which product you want, you’ll need to complete an application form. If you chose to make an application with Which? Mortgage Advisers, one of our expert advisers will submit the application for you and we will manage the application process from start to finish, through to completion.
If you choose to use an adviser they will explain the whole application process including the credit check(s) involved and at what stage you would expect things to happen. Some things to consider if you decide to submit an application yourself is that that the lender will subject the application to a credit check and may ask you to provide additional documentation such as proof of earnings. It may also want to survey your property to establish its value. If it is happy to lend to you, it will issue you with a formal mortgage offer, including a key facts illustration laying out the terms and conditions of the loan.
6. Find a legal expert
Borrowers who are remortgaging will usually need a solicitor to handle the legal side of the transaction. Some lenders operate using a panel of firms while others leave the choice to you. The solicitor will handle the paperwork and arrange for the transfer of funds once the remortgage is complete. Some mortgage advisers will liaise with the solicitor on your behalf and chase up outstanding items – when choosing an adviser it’s worth asking if they will help with chasing up the legal aspects of the remortgage.
Take independent advice
Anyone remortgaging should consider taking expert advice on the process. An independent adviser will help you choose the right type of product, help you identify the best deals and support you through the transaction.
Our expert advisers will undertake a comprehensive search of the market – looking at thousands of products – to ensure they find what suits your needs. We’ll manage your application from start to finish and liaise with the lender and solicitor on your behalf. And because our staff are paid a fixed salary – and don’t receive commission – you can be confident that they’re focused on getting you the best deal.