Many of our clients are looking to either raise money or switch to another deal, ideally to get better terms on their mortgage. The main requests include :
As with any normal Mortgage Application, you have to show the loan is affordable, the property is adequate in condition and value, and that you are not over-committed. Below is a guide to the requirements and process in obtaining a remortgage :
Paperwork is always a major requirement for any mortgage application. We will need copies of your last 3 months’ bank statements, payslips and your current ID. If you are self employed then we will need either your Tax Returns (SA302) or company accounts.
Ideally you would have had a recent mortgage statement or know approximately what the balance is. This figure can change on a daily basis, so a good approximate balance at this stage is ideal.
What is your current monthly payment? What can you afford to pay? Outstanding Term, etc. (Most of this will be on your last mortgage statement so please keep it!)
We also need to know how much your property is worth – has a similar property been sold in your local area? Anything recently been sold that is listed on Rightmove? These are normally a good guide.
All lenders will need to check that the new mortgage is ‘Affordable’, even if you are borrowing the same amount (or less).
‘Affordability’ is simply checking that the mortgage, and all of your regular bills and committed costs are affordable with your current level of income. The lender will assume though that the mortgage interest rate is not just the current low rate, but an average rate from the last few years (typically 5-7%). Could you afford the mortgage if there was a significant increase in interest rates?
Therefore we need to know about the number of people in your household, and any committed costs – such as other Finance, Loans, Credit Cards, Childcare costs, Maintenance payments, Compulsory Pension contributions, Student Loans, Travel Costs.
This, combined with your personal income, will determine if the new mortgage is affordable, and if so we can proceed.
In the same way as if you were buying a new property, we would look to get a ‘Decision in Principle’ from the chosen lender, and assuming everyone is in agreement, we will submit a full mortgage application.
As before, we will administer the mortgage application from start to finish, submitting all supporting paperwork (Income, bank statements, Identifcation, etc.).
Assuming we and the lender agree that the mortgage is ‘affordable’ they will instruct a survey to be completed, to check on the property condition and the value of the property.
Sometimes the lender may complete an ‘on-line’ valuation, if there is enough information held about the local property and property values. Often used if there is a lot of equity in the property.
Either way, the valuation is normally free of charge in a remortgage – please ask for details.
Once the lender has had all the paperwork from us, and the valuation back, they will look to offer the mortgage.
If the valuation has come back lower than expected, it might mean that you qualify for the next range of mortgage products – so something a little more expensive. This is typically when you move ‘Loan to Value’ bands, for example the application was for a 75% LTV product, but the valuation suggests an 80% LTV product is needed.
The mortgage offer will be sent to you, us and the solicitors as usual. We will check all of the terms and figures, and will check through the special conditions to ensure there is nothing that might delay completion
There is no exchange of contracts – simply the remortgage is scheduled for a particular day (typically a day or two after your current deal expires), funds will be drawn by the solicitors and the current lender will be repaid. A redemption statement will be sent to the solicitors confirming the final balance, and if there is any money left over, this will be sent to you.
If you have borrowed additional monies, say to repay loans or for home improvements, then a larger sum will be payable from the solicitors – check for the most cost effective way they can send this money to you.
Essex Home Finance Ltd is an Appointed Representative of Mortgage Intelligence Ltd which is authorised and regulated by the Financial Conduct Authority under number 305330 in respect of mortgage, insurance and consumer credit mediation activities only.
Registered address: 1 High Street, Chelmsford, Essex, CM1 1BE.
Registered in England & Wales under number 10607263.
Your home may be repossessed if you do not keep up repayments on your mortgage.
We do not charge for Residential First Time Buyers, Residential Home Movers, Residential Remortgage, and all Product Transfers (Residential or Buy to Let).
There will be a fee for all Buy to Let Purchase and Buy to Let Remortgage cases. Typically our fee will be £149, payable on Offer. We will agree any fees with you before we proceed with your case.
There will be a fee for all Equity Release Mortgage cases. Typically our fee will be £695, payable on Offer. We will agree any fees with you before we proceed with your case.
We always aim to provide a high quality service to our customers. However, if you encounter any problems and we are unable to resolve them you can take your complaint to an independent Ombudsman.
Our advice is covered under the Financial Ombudsman Service. You may be able to submit a claim through the EU Online Dispute Resolution Platform If you live outside the United Kingdom or if you prefer not to deal directly with the Financial Ombudsman Service.