How long can a remortgage take?
A remortgage can take from between 4 weeks and 8 weeks dependant on if you are doing product transfer or if you are switching to a new mortgage lender. The length of a remortgage will depend greatly on the complexity of the remortgage.
How quickly can you remortgage?
Remortgages can be done very quickly and in some cases take 1 week or less to complete whilst they can also take longer based on different scenarios.
What affects the remortgaging process would be things such as:
Have you got all your documents and remortgage application data ready? (A mortgage broker could help you do this)
Are you switching products with your current mortgage lender or are you switching to a new lender when you remortgage? Switching to a new mortgage lender will naturally take longer as you don’t have an existing relationship but a product transfer with the same mortgage lender could be done is as little as 3 days.
What is the process of remortgaging?
The process of remortgaging is pretty and will greatly resemble the process of getting a mortgage. The below is an indication of the process of remortgaging broken down into different timelines. This is simply a guide and you may be able to remortgage much faster or even much slower than this.
The remortgage process could be as long as below:
Day 1- Fact-find
This process shouldn’t differ much regardless of if you are a going through a mortgage broker or if you are going to a mortgage lender directly.
You should be aware that remortgaging through a mortgage lender directly means you will likely miss out on the thousands of potentially cheaper mortgage products available on the open market through a mortgage broker.
A mortgage broker or mortgage lender will require a copy of the following information from you during the mortgage fact-finding process:
- Your income details( salary, bank statements, p60 slips, tax returns or an employee reference letter)
- Personal information( name, date of birth and address)
- Access to your credit file with the information above( so your consent to access your credit file)
- Your current mortgage details( lender name, the amount owed, equity gained, APR, initial mortgage amount etc)
- Details about what you are looking to achieve, your immediate and future financial plans
The two most important pieces of information required from you will be your credit report and income data. Your credit report is important as the mortgage advisor will be able to see if you may be eligible for a mortgage or not based on the data on your credit file.
They will also be able to verify your home address, some of the information you have already submitted on your current mortgage and your repayment history on your current mortgage.
If you have missed any payments or have a bad credit score and history then you may require a bad credit mortgage broker to assist you in finding a mortgage lender that may be suitable for you.
If your credit score is low then this will be a good time to find out so you can begin to make preparations and plans of how to build credit before considering reapplying for a remortgage at a later time.
If you are self-employed then although it will be much easier getting a remortgage than your mortgage may have been due to having to prove your income, you may still have to seek the services of an experienced self-employed mortgage broker to help you with your remortgage.
For a self-employed remortgage you will also need to provide:
- At least one year of accounts
- An accountancy letter confirming your income
- Your tax returns
The mortgage advisor will then provide you with a recommended product based on the information you have provided. This will outline how long the remortgage process could end up being for you.
Day 2 – An agreement in principle
An agreement in principle is a document that a mortgage lender issues to indicate that they may be willing to lend to you. Agreements in principle aren’t a guarantee from the mortgage lender and an agreement in principle can be given and you still end up having your remortgage declined by the lender when you make a full application.
Before obtaining an agreement in principle from the mortgage lender, your mortgage broker or mortgage advisor from the lender will seek your written consent then they will apply for an agreement in principle.
They will make an online application with the information you have provided earlier and then get an agreement in principle from the mortgage lender.
If the mortgage lender declines you at this point, don’t be too worried as the agreement in principle is usually carried out with a soft inquiry on your credit file and this does not damage your credit score and neither is it available to anyone else but you.
If you have been rejected for the agreement in principle then you should consider why, ask the mortgage lender and check your credit file to ensure they aren’t any negative marks. If there are any you should look to build credit to increase your mortgage affordability.
You should check your credit report with the credit bureaus such as equifax and avoid making too many credit applications in a short time and certainly avoid making any credit application after you have been declined credit.
If you have received an agreement in principle then the mortgage lender will wait for you to make a full application at which point they will do a more in-depth dive into your finances, your credit score and the property.
Day 3- Full mortgage application:
At this point, you have gotten your mortgage agreement in principle and can now confidently make your full mortgage application.
You will need to curate all your documents together before you or your mortgage broker can submit your mortgage application to the lender.
These documents include:
- Identity documents: Valid driving license, a valid passport or identity card.
- Proof of income: You may need to submit your payslips for the past 6 months, your bank statements for the last 3 months and you may need to submit your tax return document. You may also need to submit your p60 to evidence any bonuses.
- Proof of Residency – A valid driving license( if not used above for proof of identity), a bank statement or utility bill should also be sufficient but they will all have to be dated within the past 3 months.
- Proof of Income/Earnings (Self Employed) – Usually, the last two years SA302s and corresponding tax year overview documents or last two years trading accounts or an accountant reference.
The mortgage lender may request further documents due to the type of case you have or the documents you submitted could be sufficient enough.
Day 4- Remortgage valuation:
A mortgage lender will revalue your home to ensure that they are lending on a property with some value.
A remortgage valuation is one of the things that can increase how long a remortgage may take based on how it is done.
Some mortgage lender may offer a free valuation for remortgaging with them whilst others may charge you a remortgage valuation fee.
Different mortgage lenders will have varying requirements on how they decide which valuation method to use.
Most mortgage lenders will make this decision based on the amount of risk they are taking hence the loan to value(LTV) for the current mortgage and if the borrower is a current client of theirs or not. These key points are what separate a remortgage from taking as long as 5 days or as long as 3 weeks
The three types of valuations mortgage lenders undertake are:
A Desktop Valuation – This is an online valuation which happens on a computer. Different algorithms and data points are used to determine the value of a property but every now and then the property value generated might appear invalid and the mortgage lender will order an in-person valuation.
A Drive by Valuation – With this valuation someone will literally visit the property but look around it and make notes in regards to any significant issues that may lessen its value. The person doing the valuation will only be able to see the parts of the property that are visible to the public and may not see the back of your house etc. This means if you have made renovations, added an extension, for example, these may not b taking into account when producing this valuation report and for that reason, this valuation isn’t the most accurate either.
An Internal Inspection – With this valuation, you will need to agree a visitation time with the valuer as they will need access to all of your property. This is the best valuation and typically mortgage lenders will charge for this.
Once the valuation is complete your mortgage lender will get the valuation documents and then compare them to your mortgage application to ensure you are still eligible for the mortgage and the loan to value(LTV) is still within the criteria initially offered to you.
Day 5 – Your remortgage offer:
Once your mortgage valuation has been checked, all supporting documents have been verified and checked, the mortgage lender will then assess everything one last time and let you know.
The mortgage lender will let you know their decision.
It could be:
Accept – The mortgage lender is happy and will give you a remortgage.
Refer – The mortgage lender needs to look into your case further.
Decline – The mortgage lender will not be offering you a remortgage. This may be the case even if they have given you a mortgage agreement in principle. The mortgage lender can still decline your mortgage.
You can request information on why the remortgage was declined but mortgage lenders will usually just refer you to the credit bureau.
If you have been accepted for a remortgage then the remortgage lender will give you a key facts illustration document detailing out the specifics of your remortgage.
Once you have received the remortgage offer, you will have a 7 day reflection period. You can use this time to decide if you want the remortgage or not.
You cannot complete on your remortgage until the reflection period has passed, however, if you are happy to proceed with the remortgage offer before your reflection period ends you will be able to waive your right to the reflection period by simply signing a waiver declaration, this is usually supplied by the solicitor (conveyancer) working on your case.
Day 6- completion & closing:
Once you have agreed to do the remortgage you can hire a conveyancer or you may have already hired one earlier in the process.
Some mortgage lenders will offer free legal service but the solicitor will in the interests of the mortgage lender to ensure the remortgage is a good fit for them.
You can hire your own conveyancer who will carry out the legal work needed to close on your remortgage.
Once you have instructed your conveyancer they will issue documentation that will need to be completed and returned by your.
Once this is returned they will carry out a number of checks and if no issues are found they will write to your current mortgage lender to request a redemption statement(You can read a guide we wrote about the halifax redemption statement to get an idea of what this is), this statement will let your new mortgage lender exactly how much they have to pay to settle your current mortgage.
once received the solicitor will notify your new lender that they are ready to complete on your remortgage and will request your funds for a specific date, the solicitor will repay the existing mortgage on the specific date requested and any additional/surplus funds will be paid directly to you.
What happens after the remortgage offer is issued?
After the remortgage offer is issued the conveyancing process starts but this is usually very brief so it could take about 3 days or less
What does a solicitor do when remortgaging?
The job of a solicitor during a remortgage is to:
- Request and identify the person seeking a remortgage
- Request title deeds and/or official copies of the register, and copy lease (if leasehold)
- Order local authority search or indemnity insurance
- Request the redemption statement from the current mortgage lender
- Pay off your current mortgage lender.
What happens after you have completed your remortgage?
After you have completed your remortgage your new mortgage lender will write to you informing you of the payment dates and the land registry will be updated with the new details of your remortgage.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.