Remortgaging: Don’t wait until your fixed-rate ends to apply
Many people wait until just before their current fixed-rate mortgage ends to find a new rate, but we recommend that everyone should start the process 6-7 months before, ensuring they secure today’s rate and giving them enough time to prepare. Mortgage offers last up to 6 months from the date they are issued, but note the length of time can vary from lender to lender.
So why does a mortgage offer have an expiry date? An offer is a snapshot of your current circumstances based on your household income, interest rates, credit history and the housing market at the time of your application. These factors fluctuate, which is why any mortgage offer expires after approximately 6 months.
When is it time to re-mortgage?
It’s time to check the latest offers and apply for a mortgage if your current mortgage deal is about to end or has already moved to a follow-on rate. For example, if your property is worth more than when you bought it, your loan-to-value ratio has changed, this could mean access to a wider range of deals.
You may also want to consider remortgaging to help you raise money for home improvements if a big life change is coming up or you are embarking on a special purchase – but always think carefully about whether you can afford the extra amount over the full mortgage term. If you’re planning to consolidate other debts into a re-mortgage, you should seek independent financial advice because your home could be at risk if you cannot make the payments.
When remortgaging, you may be able to save money by switching to another mortgage product; reducing your mortgage term or even borrowing a bit more, so we advise you to always shop around and consider a range of lenders. If you’re looking to re-mortgage, we have access to over 100 lenders throughout the UK and have vast experience in helping clients with their remortgaging.
Remember to ask any prospective lenders if you will need to pay an exit fee or early repayment fee if you want to remortgage again in the future. Check with prospective lenders if they to charge any of the following:
- Application/Arrangement/Product Fee – a charge to set up your new mortgage
- Valuation fee – to confirm the value of your property
- Solicitor’s fee – a solicitor will need to manage the transfer of your mortgage
At Greenacre we work with you in advance to make sure your mortgage continues to match your needs, comparing your existing deal with the rest of the market to find the most suitable product. We’ll do it all within good time, so you don’t ever pay more on your mortgage than you have to.
Once you have decided on a product, filling in your mortgage application online will require you to provide information including your household income, the amount you want to borrow, and how much deposit you can afford. The process is generally the same if you are buying a home or remortgaging. The remortgaging process typically takes from 4 to 8 weeks after you apply, depending on the lender and your personal circumstances.
When the mortgage lender is satisfied with the information you have provided, and you’ve passed a credit check with the required credit score, you’ll receive an Agreement In Principle (AIP). This can also be called a Mortgage In Principle (MIP), mortgage agreement in principle or a decision in principle. This is a written statement from the mortgage lender saying how much they might lend. An agreement in principle is usually valid for 30 to 90 days after it’s issued.
How long does a complete mortgage offer take to come through?
Once you’ve accepted an Agreement In Principle and you’re ready to move forward with a complete application, it can take anywhere from 2 to 6 weeks to receive the mortgage offer. During this time, a lender will carry out underwriting checks which are an in-depth assessment of your financial situation and credit history. This will possibly require more information from you including:
- 3 months payslips from your employer
- Passport or driver’s licence as proof of identity
- 3 months Bank statements
- A P60 form from your employer
- 3 months copies of utility bills
With all that is involved in a re-mortgage, you can see why we always recommend that you do not wait until the last few weeks; you need time to shop around, gather information and then there is the time the whole process takes. Once you have applied, you can sit on the offer, and eventually even disregard the application, but being prepared is better than waiting until the last 3 weeks before expiry and scrambling with all documents you need to produce.
If your fixed mortgage rate is coming to an end, or if you are considering a re-mortgage or any other reason, get in touch and we can give you all the expert advice to help you get the most out of your mortgage, protection and home insurance. Unlike many of our corporate competitors, we are a completely independent Whole of Market Mortgage Broker offering a choice of around 100 lenders and up to 25,000 different mortgage schemes.
For more information about any of our services, please don’t hesitate to get in touch by calling us on 0203 3939 222.