You want to get your remortgage underway however a question often asked is. When is too late and when is too early to start my remortgage? In this guide, we make it very clear when you should get your remortgage underway.
Should I Remortgage now?
You may be asking yourself, should I remortgage now? The best time to start the remortgage process is 6 to 4 months before your existing rate finishes. If your mortgage situation is straightforward 4 months will suffice.
Not everyone’s remortgage will be the same and depending on what you are trying to achieve with your remortgage, you will find the date you can start the remortgage will differ. In this guide, we will show you the best time to start a remortgage if you want to get the best rate and mortgage deal. We will also give the best time to start if you are wanting to raise money for home improvements or for debt consolidation.
Knowing when you can remortgage is vital as doing it too soon could cost you a lot of money. Fail to remortgage before the end of fixed rate mortgage and you will fall onto a costly lender’s standard variable rate.
Before we delve into the best time you can remortgage, let’s go through the mortgage process.
Related reading: Can you remortgage early?
What is the remortgage process?
The first step to remortgaging starts with knowing what you are trying to achieve.
Stage 1: Knowing your goals and getting advice
- Are you wanting to borrow extra?
- Are you wanting to raise extra to enable you to carry out home improvements? Are you wanting to remortgage for debt consolidation?
- Perhaps you want to decrease the term?
It makes sense to have an idea of what you want to achieve before exploring a new mortgage deal. Once you have an idea of what you want to achieve, your mortgage broker will find the best-suited mortgage lender that will accept you and your situation whilst providing you with the lowest mortgage deals.
Stage 2: Meeting the Mortgage Lenders criteria
Once you have the right mortgage lender you need to get the application underway. Every bank and building society will need different information from you however they will need to check if you fit their affordability. The lender will ask to see your last 3 months payslips to learn of any loans and credit cards you may have and to see your last 3 financial months’ bank statements. Once the lender has the required documentation they will check with their affordability remortgaging calculator to see how much you can borrow and what they are willing to offer you as a new mortgage deal.
The lender will now submit a mortgage decision in principle also known as a mortgage agreement in principle. At this stage, a credit check will be carried out as part of the mortgage application to make sure your credit score is acceptable.
Stage 3: Getting a valuation survey
Once the application is accepted they will want to carry out a valuation survey on your property.
This will be either a:
- Desktop valuation
- Drive-by valuation survey
- Physical valuation
Once the lender is happy that your property is suitable to secure a mortgage on, your application will go into their underwriting department.
The lender’s underwriting department will pull everything you have provided together along with the remortgage valuation survey. Once they are happy that everything meets the mortgage lenders’ criteria, they will then produce a mortgage offer.
Stage 4: Completing your remortgage
At this stage, the solicitor or conveyancing company will start the process of transferring the funds of the new mortgage to pay off your current deal. They will also change the name of the bank or building society with the land registry office.
For more details on ‘what is a remortgage‘ < click here.
Would it be easier to stay with the existing lender?
We don’t blame you for thinking that it would be easiest to stay where you are and stick with your current mortgage deal. It may sound a bit of a nightmare to switch however your current lender will rely on you feeling as if it all seems too much to leave them. They will offer you a rate that seems like a great fixed rate deal but probably isn’t.
With over 14,000 different mortgage interest rates and deals in the UK mortgage market, don’t assume it makes sense to remortgage with the same lender that you have been with for the last few years. You could lose thousands of pounds by staying and settling for a poor interest rate and current deal.
Compare mortgage lender deals with the help from a mortgage broker
The solution to finding the best remortgage product is to use a fee free mortgage broker who will do all of the above for you. They will search the whole mortgage market and do a mortgage comparison of 14,000 different interest rates and remortgage deals. They will find you the very best rates and mortgage deals and when they have they will then submit the mortgage application to the bank or building society for you.
The broker will then be talking to your new lender every week. They will also liaise with your solicitor until the new mortgage is ready.
A mortgage broker sounds great but how much are their services?
Mortgage brokers will charge anywhere between £500 and £1,000 for remortgaging you.
However, there is such a thing as a Fee Free Mortgage Broker who does not charge for their services. In fact, there are thousands of them in the UK so will highly recommend that you find one that works best for you.
With the help of our mortgage team, you can actually remortgage for free if you take advantage of a few incentives.
How do I find a fee-free mortgage broker?
You have a couple of choices. Firstly ask your family and friends do you know of a no-fee mortgage broker near me. If this is unsuccessful get Googling!
Google : ‘Fee free independent mortgage broker near me‘
This will bring up a list of brokers that will not charge you and will also be able to help you in remortgaging. However, don’t settle for the first one you see, spend a little time comparing a few of them. Think to yourself:
- Is there website up to date and modern?
- Do they have a big online presence and a strong brand?
- Do they communicate with their customers using modern communications such as WhatsApp and video call?
- Most importantly check out their Trust Pilot and Google review. There should be lots of mortgage reviews and make sure they are mostly 5-star reviews.
YesCanDo to the rescue…
Here at YesCanDo Money, we are a family-run and independent whole of market fee free mortgage broker based in Hampshire. We of our fee free mortgage services throughout the UK. Our services are highly recommended and are completely FREE!
We have built the business over the past 30 years by helping and advising clients to make the right and best decision for their situation. We use a combination of good old-fashioned customer care with the advantages of modern technology. You will be able to have a face-to-face meeting via Zoom or FaceTime or Skype with an adviser or if you prefer a chat over the phone.
We will ensure you don’t leave your existing mortgage deal early by checking you don’t have any early repayment charges on your current deal. We will then work very hard to get you a great remortgage deal with lower monthly repayments. Being a whole of market broker we compare mortgage deals from every lender with the aim to get you a cheaper mortgage deal.
Our team of 17 experienced advisers and consultants will advise you on the best new deal when remortgaging. They will then submit your mortgage on your behalf as well as talk to your conveyancer through the whole process right up until completion.
We have found WhatsApp to be really popular with our customers as it makes getting updates and communicating very easy. Let’s get your remortgaging journey started. We are here to help you every step of the way…
Can I borrow more money when I remortgage?
If you are considering home improvements or possibly paying off some debts, then this is the perfect time to do it. This can be done as part of your remortgage, meaning you will be getting the best rates whilst avoiding any additional charges you would have received if you had gotten a further advance from your existing lender! Most people wait until they remortgage to plan any home improvements or balance their finances as this is the most financially cost-effective time to do it.
When can you remortgage to a new mortgage deal?
You can remortgage as long as you are not tied to your current deal. Remortgaging too early will lead to you having to pay an early repayment charge. The early repayment charge could be several thousand pounds so get your broker to check this out for you first.
Would it be a good idea to go onto my mortgage lender's standard variable rate?
It is very unlikely that the variable rate is going to be any good for you! The majority of the time going onto your lender’s standard variable rate will see your monthly payment increase significantly.
Can I pay a lump sum off my mortgage?
Most lenders allow you to pay 10% off your outstanding balance each year. This is usually sufficient for most years however some years you may want to pay off more than 10%. Perhaps you have been left an inheritance? Remortgage time is the perfect time to pay off as much as you want without any fines or charges from the lender. Your mortgage adviser in conjunction with the conveyancer can make sure this happens. You will lodge the extra payment with the solicitor who will pay this together with the new mortgage raised to your old lender.
Is it a good time to remortgage?
Has there ever been a better time for remortgaging? With the bank of England increasing the base rate from an all-time low in 2021, the interest rates have reflected this in the fixed rates and overall deals and incentives that lenders are now offering. Interest rates are starting to rise quickly and therefore people are remortgaging to get a new deal and a low rate while they can. Rates will continue to rise into 2023, so now is a good time to consider remortgaging early.
How far in advance should I get preapproved for a mortgage?
The very earliest you will be able to get pre-approved is 6 months before your current deal with your present bank or building society ends. Although you are probably keen to get a new mortgage with a great interest rate and new fixed rate waiting; that 6 months is very important!
Do I remortgage if I am considering moving in the next couple of years?
If you are considering moving home soon you need to step carefully. Your first option would be not to remortgage so you can look afresh for a new lender at the time of moving home. The problem with this option is it will more than likely mean you will go onto your existing lender’s variable rate and this could prove to be very expensive.
Your second and wiser option is to remortgage when you need to however it is essential that you choose a lender that offers you a portable product! What this means is that when you come to move home you will be able to use your existing mortgage and it will be ported to your new home. If you are increasing your mortgage you will need to top up your existing loan.
Don’t worry if this all sounds complicated. Your mortgage adviser will be used to doing this on a weekly basis and will be there to guide, help, and advise you through your options.
Should I pay an arrangement fee to get a lower interest rate?
We get asked this question often and the answer is not straightforward. However, if the mortgage you are applying for is over £150,000 the answer is usually yes.
So you are looking to remortgage what is the best rate to choose, the low rate or the even lower rate at a cost? You have two options to help you answer this question:
A fixed-rate that has no arrangement fee
A fixed-rate that is lower but with an arrangement fee
The option you choose should be obviously the best deal for you and your situation. Learn more about arrangement fees and their overall deal here.