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How to Remortgage: A Step-by-Step Guide

Why remortgage when a fixed-term deal ends? If you stay where you are, you'll switch to the lender's SVR, a standard interest rate, and your mortgage will cost more each month.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-07-17
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How to Remortgage: A Step-by-Step Guide

Learning how to remortgage is important if your current mortgage deal is due to end, know you are paying higher-than-average interest rates or want to remortgage to release equity.

Why remortgage when a fixed-term deal ends? If you stay where you are, you'll switch to the lender's SVR, a standard interest rate, and your mortgage will cost more each month.

Revolution Finance Brokers works through what is remortgaging, how it all works, and each step from start to completion.

Step 1: How to Remortgage at the Right Time

Let's recap some of the basics. What is remortgage mean? It's a process whereby you replace your current mortgage with a different product, either with the same or an alternative lender.

What does it mean to remortgage? In effect, your new home loan repays the existing mortgage, and you start making repayments on the terms of the replacement mortgage agreement.

There are several reasons you might need to think about how to remortgage a house:

  • Your lender contacts you to advise that an introductory offer is coming to an end.
  • You see more competitive mortgage rates available.
  • You wish to increase or decrease the amount of mortgage borrowing you have.
  • You want to consolidate other debts into your mortgage.
  • You’d like to remortgage to release equity from your property.

What does it mean to remortgage to release equity? If your property is worth more than your mortgage, you can borrow a higher value, up to the lender's LTV cap, and use that capital for other outgoings, such as financing home improvements.

If you are unsure whether now is the right time or how to remortgage a house, please get in touch for further guidance.

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Step 2: Verify How to Remortgage for the Right Value

Your lender can provide a statement on request, which shows how much you have left to pay. This document is useful if you're debating why remortgage now, and it means you have the information at hand to make informed decisions.

Homeowners who are unsure how remortgaging works should always start by looking at their current contract, so they know what they’re paying in terms of interest and fees, not just the monthly amount.

Step 3: Why Remortgage With a Broker?

Independent brokers with whole-of-market access can recommend any remortgage from any lender we feel is appropriate for your needs and offers the best value for money. Because of how remortgaging works, you must know what alternative products are out there to ensure you're not paying more than necessary.

Learning how to remortgage your house is also significantly easier and normally faster, with an experienced broker to help you make informed decisions.

Step 4: How Remortgaging Works: Choosing a Product

One of the many reasons we suggest working with a broker when working out how to remortgage and reduce your costs is that there are potentially hundreds of lenders and products. Rolled-up fees, free legal charge incentives, interest rates and exit fees are all relevant factors you must consider.

Homeowners unsure how to remortgage a house and get the best product for their circumstances can access support to choose between terms, repayment, interest-only and other options such as an offset remortgage.

Step 5: How Remortgaging Works in Terms of Legal Requirements

If you are remortgaging through a new lender, you’ll need a conveyancer or solicitor to manage the paperwork, handle the mortgage deeds, and transfer the property title as appropriate.

Knowing how to remortgage your house isn't solely about selecting lenders but understanding each stage, including the legalities.

Step 6: What Is Remortgaging Eligibility Checks?

Next, your remortgage provider will conduct affordability assessments and other checks. Understanding how to remortgage your house with the best-suited lender makes a big difference because if at this stage, the lender finds they cannot make an offer, you may need to start your search again.

Unsure how remortgaging works and what background checks your lender will conduct? It would help if you had the following documents ready:

  • At least three months of payslips, bank statements or self-employed accounts.
  • Utility bills and credit card statements, plus three years of address history.
  • ID documents and a P60 where relevant.
  • Information about other debts and outgoings.

Can I find out how to remortgage my house if I don't have this documentation? If you are unemployed, have a variable income, or have any other issues with providing your affordability and eligibility records, an independent broker should be your first point of call.

Looking at how to remortgage your house could mean picking a niche or specialist lender if you cannot meet the standard eligibility criteria imposed by mainstream banks.

Step 7: What Is Remortgage UK Agreement in Principle?

Once the lender is happy with their assessments, they will offer an agreement in principle. If you're new to learning how to remortgage, this document is a written initial proposal that tells you what they're willing to offer and at what rate.

What does it mean to remortgage with an agreement in principle? This offer isn't binding or final. A lender can still withdraw the offer if their more in-depth underwriter's assessment uncovers any complexities, such as issues with your credit history.

However, working out how to remortgage a house means you normally start with this agreement before submitting a full application.

Step 8: Property Valuations: How Remortgaging Works

The next element is a valuation of your property, and some lenders provide this service free of charge, but others levy a cost. Because of how remortgaging works, some lenders might conduct a desktop valuation, and others may require a full property survey, particularly if you're remortgaging with a different provider.

Step 9: How to Remortgage a House and Submit a Full Application

After all these steps are complete, you are ready to apply for a remortgage, provided you’re happy that the agreement in principle is satisfactory. Why remortgage with a different lender? If you have found a product or offer at a better rate, you don’t have to accept the agreement in principle.

Step 10: How Remortgaging Works – the Offer to Lend

If the lender approves your application, they will send a full offer to you or your solicitor. How to remortgage a house in advance? The offer may be valid for up to six months, so you can proceed as you wish, normally to coincide with the end of a fixed-term deal.

The final steps are for your solicitor to draw down the finances from the lender, repay the old mortgage, and register the new details with the Land Registry.

At any stage during the remortgaging process, an independent broker can provide ongoing updates, liaise with your selected lender, or review your mortgage offer to ensure it is the best option based on your borrowing requirements.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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Frequently Asked
Questions

Remortgaging means you swap your existing mortgage to a different lender or product. The new mortgage repays the balance on your current loan, and you start making repayments based on the terms of your replacement mortgage.

Remortgaging before you hit the end of a fixed-term deal means you avoid switching to the lender’s SVR, which is inevitably a higher interest rate. You can also remortgage with a different lender or product with greater flexibility, better terms, lower charges, or reduced interest rates.

Depending on how straightforward your application is, remortgaging takes around four to eight weeks.

There are many reasons to remortgage, from reducing your monthly mortgage payments, releasing equity from your property, consolidating other debts, or finding a product that allows payment holidays or overpayments.

Provided you have enough equity in your home, you can increase your mortgage value through remortgaging to pay off other debts, such as credit cards or personal loans. The interest on a mortgage is lower than a short-term debt product, although it might take longer and cost more to repay over the long term.

Remortgage is a relatively simple process, and an independent broker can recommend the best products and lenders or steer you through the application process if you have any specific requirements.

Your lender might charge an early settlement or exit fee if you are within a fixed period. Most borrowers wait to remortgage until the fixed term has ended, although in some cases, the cost savings available elsewhere may be more than the exit charge.

The primary cause of remortgaging delays is paperwork errors or incomplete information. Revolution Brokers streamlines the process, negotiates directly with your lender, and checks your application for completeness to finalise your deal as quickly as possible.

Releasing equity means you increase the amount you borrow against your home, although this will typically be up to around 80% of the property value. You can release equity to pay for things like a wedding, holiday, or refurbishing your home by remortgaging for a higher amount.

The remortgage market is vast, and it is very easy to miss an excellent remortgage product that could substantially reduce your outgoings. Please contact Revolution Finance Brokers at any time to discuss the best remortgages aligned with your needs and circumstances.

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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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