A remortgage occurs when your mortgage product is redeemed with a different mortgage product from a new lender. Mortgage borrowers typically remortgage when their current mortgage product expires to avoid it switching to the lender’s Standard Variable Interest Rate (SVR).
This depends on which broker you use. At Boon Brokers, our advisers have whole-of-market access, directly authorised status with the FCA, and do not charge client fees at any stage of the process (from start to finish). We receive a commission from the lender once your case completes, which has no impact on you. If your case does not complete, we do not receive a commission and you will not be charged. Other brokers may charge a client fee in addition to receiving commission from the lender.
There are many benefits of remortgaging. Firstly, it ensures that your current mortgage does not switch to your current lender’s Standard Variable Interest rate, which could be high. Secondly, you may be able to access a better interest rate than your current product. Thirdly, you may be able to access a mortgage product type that is more suitable for your present circumstances – such as a Tracker or Fixed rate. Lastly, you may be able to borrow additional capital for home improvements, debt consolidation, or other purposes. There are other benefits that our advisers can discuss with you.
The length of the Remortgage process depends on a few factors. If the lender has efficient turnaround times, you provide all documentation to your broker in a timely fashion and quickly book in a valuation report if it is requested, we expect you to receive a Mortgage Offer in 10-15 working days (on average) from the application date. Solicitors can normally process Remortgage Offers and arrange a completion date within 4 weeks of receiving the offer. However, solicitors normally arrange the Remortgage to Complete on the day that your current mortgage product expires. This avoids you needing to pay Early Repayment Charges to your existing lender.
If you arranged your current mortgage with a broker, a good broker would contact you many months before your existing mortgage product’s term expires. At Boon Brokers, our advisers contact existing clients via text, e-mail and post 6 months before their product term expires. The reason for this is that a mortgage offer is typically valid for 6-months. Therefore, we can apply for a Remortgage Offer with your most suitable lender many months before your product expires, giving you peace of mind. If a more suitable interest rate or product enters the market after we have produced your Remortgage Offer, we will inform you of the better product and switch.
It is likely that your existing lender will encourage you to remain with them after your product term expires. You may receive a letter from them 3-6 months before your existing mortgage product term expires requesting that you view their Product Transfer options. We would advise against doing this until you speak with a whole-of-market mortgage broker, like Boon Brokers. Even though your current lender may have offered the best mortgage product when you initially took out your mortgage, a different lender may offer a more suitable product now. Boon Brokers would be happy to process a free whole-of-market source of the market to identify the best mortgage product available to you.
No. When your solicitor receives the Remortgage Offer and processes Completion, your existing lender will be notified.
Early Repayment Charges (ERCs) may be payable on your current mortgage if your solicitor redeems it before the product term expires. Most borrowers receive a Remortgage Offer before their product term expires, but they instruct their solicitor to arrange a completion date for after the product term expiry date to avoid ERCs. There may also be an Exit Fee from your existing lender. This fee is typically between £75- £300. Regarding the mortgage from the new lender, there may be some further costs. Costs may include a booking fee (typically £99 - £250), an arrangement fee (typically £0 - £2,000 but it can usually be added to the loan) and valuation fee (typically £0 - £1,500 depending on the property and survey requested). Lastly, you may have legal fees if you appoint your own solicitor to process the Remortgage. Even though lenders may offer a ‘Free Legal’ service, where their own appointed solicitor processes the remortgage, your own solicitor is likely to offer a better and more personable service. Legal fees are usually between £400 - £1,000 for a Remortgage. This fee includes a Telegraphic Transfer fee (typically £25 - £50). Many lenders offer ‘Cashback’ as a product incentive, such as £500, which can contribute towards legal fees if you proceed with your own choice of solicitor. If you use a fee-free whole-of-market broker, like Boon Brokers, no mortgage broker fee will be charged at any stage of the Remortgage process.
Hopefully, although this is not guaranteed. A whole-of-market broker, like Boon Brokers, can advise on the best mortgage product (and interest rate) available to you at the time of your Remortgage.
Yes. When your existing mortgage product is replaced by a product from a different lender, the land registry will need to be updated. This process requires solicitor intervention. Even though lenders may offer a ‘Free Legal’ service, where their own appointed solicitor processes the remortgage, your own solicitor is likely to offer a better and more personable service. Legal fees are usually between £400 - £1,000 for a Remortgage. This fee includes a Telegraphic Transfer fee (typically £25 - £50). Many lenders offer ‘Cashback’ as a product incentive, such as £500, which can contribute towards legal fees if you proceed with your own choice of solicitor.
It is highly likely that a new valuation will be instructed for a Remortgage application. This is because your new lender does not have a valuation report for your property. An exception to this is if the new lender can access sufficient data from processing an ‘Automated Valuation’ through their systems. Your broker will inform you if an Automated Valuation has been processed.
Some lenders may offer more favourable criteria for Remortgage cases. But if the question is: ‘Do some lenders consistently offer better Remortgage products than others?’ then the answer is no. All lenders change their product offerings frequently – sometimes daily. For that reason, it is important to use a whole-of-market broker, like Boon Brokers, who can explore all mortgage product options for your remortgage.
There is no such thing as a “best type of interest rate”. At Boon Brokers, our advisers always advise each client on a case-by-case basis. For example, a fixed interest rate may be suitable for one client, but not for another. Our advisers will explain why they recommend a particular Remortgage product for your exact circumstances.
You may be able to raise money from a Remortgage that you can use for other purposes (like Home Improvements, Debt Consolidation, Buying a Second Property, etc). Your ability to raise capital from a Remortgage will depend on several factors such as your current mortgage affordability, the equity remaining in the property and the capital raising purpose. Our mortgage advisers would be happy to discuss this with you further.
You should avoid cancelling Direct Debits until your Remortgage with the new lender completes. Your current lender should contact you regarding the redemption of the mortgage. If you are in doubt, contact your current lender. Ensure that you receive confirmation that you can cancel your Direct Debit in writing just in case they register an accidental late payment, which you can then dispute with your written evidence.
Processing multiple mortgage applications during a matter of weeks can temporarily harm your credit score as the lender will process ‘Hard Credit Searches’ each time. However, a good whole-of-market broker will try to avoid too many applications. In most cases, just one application is required which should not negatively impact your credit score.
If you have not formally accepted your Remortgage Offer with your solicitor, our advisers can review your other Remortgage options. If our advisers source a more suitable product, they will advise you to switch.
Remortgage applications will go through the same underwriting process as your original mortgage application. This means that the Remortgage lender will scrutinise your circumstances in the same manner as before. If your circumstances are now different, your first port of call should be to discuss your situation with a whole-of-market broker like Boon Brokers. Our advisers can assess your new circumstances to identify your most suitable Remortgage options.
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