Finding and applying for a new mortgage deal won’t usually take that long, but you have to think about the part that’s out of your hands after the application is submitted.
There’s paperwork to file, processes to follow, and you might need to have your property revalued if you’re switching lenders.
The whole thing takes about 4-8 weeks from start to finish. Sometimes the process will be shorter and other times it’ll be longer, so it’s a good idea to give yourself plenty of time to sort out a new mortgage deal.
Here’s a breakdown of how it all works.
A typical remortgage process, step by step
Step one: fact-finding mission
Timeline: one day or more
The first thing you need to do is find a new mortgage deal.
You can do this by sticking with your current lender and moving to a new deal (this is called a product transfer), contacting a new mortgage lender directly, or working with a mortgage broker like Habito.
A mortgage broker can access thousands of deals from different lenders - we can search 20,000 options from over 90 lenders to find the perfect deal for you.
Using a broker, you’ll need to provide:
- Your personal info
- Your credit report
- Details about your current mortgage
- Details about your income and expenses
- An idea of what you want to achieve with your remortgage. Ask yourself: do you want to save money on your monthly payments? Or release equity to fund home improvements?
Step two: get your decision in principle
Timeline: one day or more
Once you’ve found a remortgage deal you like, the next step is to apply for a decision in principle or DIP (you might also know this as an agreement in principle or AIP).
Now let’s consider two possible situations:
- Your application is accepted: When the lender accepts your DIP application, it means they think you can reliably repay the mortgage loan. If this happens, you can confidently move onto the next step of the remortgaging process.
- Your application is declined: If your DIP is rejected, you can usually ask the lender for the reason why. They may even reconsider if you can supply additional information. A mortgage broker can help you figure out the best course of action, which might involve going back to the drawing board to fix some things in your credit report before trying again.
While a DIP isn’t an ironclad guarantee that you’ll qualify for a new mortgage deal, it’s a strong indicator that a lender might be willing to let you borrow based on the information you gave in step one.
Step three: get your documents together
Timeline: one to three days
When your DIP is secured, you can start limbering up for the full remortgage application. Just like when you applied for your mortgage the first time, you’ll have to gather all your essential documents. Here’s a quick refresher of what you’ll need:
- Proof of identity: Either a valid UK passport or driving licence is your best bet. Some lenders will also accept other forms of ID.
- Proof of address: This is usually a utility bill or bank statement posted to your home address and dated within the last three months.
- Proof of expenses: Bank statements covering the last three months should be enough.
- Proof of earnings: What you’ll need here will depend on your situation:
- If you’re employed, you’ll need to show your payslips from the last three months. You may also need your P60 to prove any additional income like bonus or commission payments.
- If you’re self-employed, you’ll need your last two years’ SA302s and your tax year overviews for those years too. Some lenders may also ask for trading accounts or a reference from your accountant.
Read more: An intro to the self-employed remortgage process
Step four: submit your full remortgage application
Timeline: one day or more
Using all this information, your mortgage advisor or broker will submit a full remortgage application to the lender you’ve chosen.
The lender will then review the application, your credit history, and your supporting documents to make sure you can comfortably afford the monthly mortgage repayments.
If you need to provide any further information at this stage, your advisor or broker will let you know. Otherwise, you can put your feet up. Now it’s just a matter of waiting.
Step five: your lender does a remortgage valuation
Timeline: one week
Whether you’re switching to a new lender or sticking with your existing one, the lender will want to check that your property is worth what you say it is before they approve your new mortgage deal.
They do this to make sure the loan they’re about to offer you is secure. Or, in other words, they want to know that they could sell your property and get their money back if you can’t keep up your repayments.
There are a couple of ways that lenders carry out property valuations:
- Desktop valuations: This is when a qualified surveyor uses recent online sales data for similar properties in your area to calculate the value of your property.
- Drive-by valuations: This is exactly what it sounds like. A surveyor will hop in their car and go see your property. It’s a brief visual inspection of its condition from the outside only – they won’t be knocking at your door for a look inside.
Read more: Your remortgage valuation explained
Remortgage valuations can cost from £250 to £1,500, depending on the size and value of your property. The good news is that many lenders now include it for free as part of the remortgage deal.
If the surveyor agrees with the value listed on your mortgage application, the lender is more likely to offer you the amount you’ve asked to borrow. Speaking of which...
Step six: you get your remortgage offer
Timeline: one to seven days
Your lender will only make their final decision once they’ve reviewed your application, supporting documents, credit score, and had your property valued.
There are three possible outcomes:
- Your remortgage application is accepted, meaning you’ve met their affordability criteria, and they’re happy to lend you the money.
- Your application has been referred, meaning they require more information before they make their decision. Your mortgage advisor or broker can help you deal with this.
- Your application is declined, in which case they won’t be offering you a remortgage deal. Unfortunately, this can happen even if the lender previously gave you a DIP. Again, an advisor or broker will help you understand why the application has been rejected and what you can do next.
If your application has been accepted, you’ll have a seven day reflection period to decide if you want to go ahead with the remortgage deal. You can’t complete your remortgage until the seven days have passed (unless you sign a waiver saying you’re happy to do so).
Step seven: remortgage completion and conveyancing
Timeline: two weeks or more
Once you’ve received your new mortgage offer (and you’re happy to go ahead with it), you’ll need to hire a conveyancer or solicitor to handle the legal work and finalise your remortgage.
Note: Licenced conveyancers are trained in conveyancing, which is the process of transferring the legal title of a property from one person to another. Even though the ownership of your property isn’t changing hands when you remortgage, you still need a conveyancer as the lender’s interest in your property (or the lender itself) does change.
Your conveyancer or solicitor will carry out several checks to make sure everything is above board with the new mortgage offer and your property. Once they’re happy with everything, they’ll write to your current lender (if you’re switching lenders) to request a redemption statement. This statement lets your new lender know how much they have to pay to settle your previous mortgage.
After your remortgage has been completed, your new lender will write to you to let you know about your new monthly repayments. Finally, the land registry is updated to reflect your new mortgage deal.
Can Habito help with my remortgage?
Yes, we can! When you remortgage with Habito, we help you find the best deal for your situation. We handle the entire application process to make sure you’re moved onto your new mortgage without skipping a beat.
Answer a few quick questions to get started.