You know your current mortgage deal is ending soon, you’ve got all your key documents ready for your mortgage broker and they’ve submitted your remortgage application. What happens next? How long does a remortgage application take?
Well, unfortunately, there is no set timescale – there are many factors involved when remortgaging which will affect how long the process takes. In this blog, we look at some of these factors.
You are staying with your current mortgage lender but switching to a new mortgage deal with them on a like-for-like basis
This is known as a product transfer. One of the benefits of staying with your existing lender and switching to a new deal with them is that you may not need to provide documents that you would have to provide if you were remortgaging to a new mortgage lender. This is assuming that you are not making any other changes to your mortgage and you are keeping the mortgage amount the same (i.e. you are not asking to borrow any additional money on your mortgage), the repayment type the same (e.g. interest only or repayment) and the same mortgage term (the number of years remaining on your mortgage).
If the above assumption is correct, then once your product switch application is submitted, your mortgage offer will be issued shortly after and your new mortgage deal will take effect at the end of your existing mortgage deal. Some lenders may even waive any early repayment charge if you are completing a product transfer meaning your new mortgage deal starts sooner. In any event, you want to ensure that you are not going to incur any unnecessary early repayment charges or be penalised by starting the new mortgage interest rate too soon.
However, don’t assume that your existing mortgage lender is rewarding your loyalty and offering you the most cost-effective deals. This is why we highly recommend you always speak to a whole-of-market mortgage broker such as The Mortgage Pride to ensure you are getting the cheapest deal overall based on your individual circumstances before choosing a mortgage deal offered to you as an existing mortgage customer.
You are staying with your current mortgage lender but borrowing additional funds
It may be that you are applying to your existing mortgage lender for extra borrowing. For example, you may be capital raising on your mortgage to fund home improvements or for debt consolidation purposes. In this scenario, your mortgage application will go through a full underwriting assessment even though you already have a mortgage with the mortgage lender.
In this case, when your mortgage application is submitted, you will be asked to provide some critical documents such as proof of your income and bank statements. If you are raising funds for home improvements, you may even be asked for quotes for the property improvements you intend to complete.
Once the mortgage lender is happy that the new mortgage is affordable for you and that both you and your property meet their current lending criteria, they will then be in a position to release a mortgage offer to you. Don’t assume that they will offer you the additional funds because you already have a mortgage with them as their criteria and affordability rules may have changed since your original application. An experienced mortgage broker like The Mortgage Pride will be familiar with the lender’s requirements and criteria and will be able to confirm if you may be able to borrow the additional funds before submitting a mortgage application. However, some mortgage lenders may only allow customers to apply for additional funds directly with themselves so your mortgage adviser will be able to confirm this for you.
You are remortgaging to a new mortgage lender
You have spoken to your mortgage broker who has recommended moving your mortgage to a new lender. The new mortgage lender will request crucial documents as part of the mortgage application to assess if they can offer you a mortgage. These documents are critical to receiving a mortgage offer so they need to be provided to the mortgage lender as soon as possible after the remortgage application is submitted. Ideally, with the mortgage application. A key thing to remember is mortgage underwriting takes time so make sure you don’t leave your remortgage application until the last minute.
The new mortgage lender will also require a property valuation. Depending on the mortgage lender and loan to value (LTV), this may be a desktop valuation (computer-based or automated) or a physical valuation. The mortgage lender is confirming that the property is good security for them to lend money on.
Once the mortgage valuation, application and supporting documents have been assessed, the mortgage lender will issue your mortgage offer providing they are happy with everything.
At this stage, a copy of your mortgage offer will be sent to you and your mortgage adviser. A copy will also be sent to your conveyancer/solicitor who will then be able to complete the legal work involved in transferring from one mortgage lender to another.
When the remortgage is due to complete, your conveyancer/solicitor will arrange for your new mortgage lender to release the mortgage funds to repay the outstanding mortgage with your previous mortgage lender.
Your new mortgage deal will take effect on the date of completion and depending on the circumstances causing you to remortgage away from your existing lender, there may be an early repayment charge or penalty to pay to leave your current mortgage lender. In any event, you want to ensure that you are not going to incur any unnecessary early repayment charges or be penalised by starting the new mortgage too soon.
On the flip side, if you know you need to complete by a certain deadline (for example your current mortgage deal is ending), you want to make sure you are prepared and applying in plenty of time.
Preparation is key when remortgaging
Each mortgage lender has their own fluctuating timescales for assessing mortgage applications and completing valuations based on the volume of applications they are processing at any given time. Your mortgage broker will be able to confirm what these are and should factor these in when recommending the best mortgage lender and deal for your individual needs.
Conveyancers/solicitors will also have their own timescales which also need to be factored in.
However, as a rule of thumb, here at The Mortgage Pride, we always recommend starting to look at your options 6 to 9 months in advance of your existing mortgage deal ending. This should help avoid incurring unnecessary higher payments when your current deal ends because your remortgage has not been completed in time.
Your mortgage broker will also be able to confirm what crucial documents are needed so these are provided to the mortgage lender with your remortgage application to avoid any unnecessary delays.
When it comes to remortgaging, remember:
- The documents you submit with your remortgage application will affect how quickly your mortgage is offered so make sure you have them ready to go.
- There are no guarantees when it comes to the speed of a remortgage application so make sure you don’t leave it until the last minute to apply.
- If you are remortgaging to a new mortgage lender, you will need a solicitor/conveyancer to complete the legal work.
- Using an experienced mortgage broker can help make the whole remortgage application process smoother for you as they should check all your crucial documents to ensure they are acceptable, submit the remortgage application on your behalf and chase it through to offer and completion leaving you time to do more enjoyable things in life.
The Mortgage Pride have over 18 years’ experience in helping homeowners remortgage and understand their options based on their individual circumstances. Our remote service option provides homeowners all over Stoke-on-Trent, Staffordshire and beyond access to friendly and independent mortgage advice. Contact us today to arrange a free initial chat 01782 450050 hello@themortgagepride.co.uk
*Your home may be repossessed if you do not keep up repayments on your mortgage. You may have an early repayment charge to pay to your existing lender if you remortgage. Think carefully before securing other debts against your home.
Also take a look at Remortgage Stoke on Trent