Remortgages

Remortgaging Procedures

The procedures involved in remortgaging are simpler and the costs are lower than for an initial property purchase with a mortgage.

An application for a remortgage is similar to one for an initial mortgage. Once the remortgage has been agreed in principle, a valuation will usually be required by the lender. However, if you remortgage with your current lender, a formal valuation may not be required, depending on the value of the property and the remortgage sum required. Even if you are changing mortgage lender, only a basic valuation survey should be required. This is because you are probably already in residence and therefore likely to have a pretty good idea of the current condition of the property.

In addition, the lender will usually expect confirmation that repayments have been made regularly on the previous mortgage. Just as for a regular mortgage, a remortgage lender will request details of the borrower’s employment position and monthly salary. Self-employed applicants will usually be asked to provide 3 years’ trading accounts to ensure that they receive a mortgage offer. Alternatively, they might have the option of choosing a self-certification mortgage.

If you are changing lenders, the new mortgage provider will insist that a solicitor or licensed conveyancer carries out local searches and confirms the title details of the property.

When the mortgage funds have been released by the new lender, the solicitor will repay the previous lender and inform the Land Registry of the changes that have taken place.

Remortgaging Costs
The one big potential cost that you avoid when remortgaging is Stamp Duty, because you already own the property.

However, you will become liable for some or all of the following costs:
solicitor’s fees;
valuation fees;
mortgage provider’s arrangement fee;
broker’s fee;
Land Registry fee;
early redemption penalty;
discharge fee for existing mortgage.

Many lenders are not interested in providing low value remortgages, so if you are looking for a sum of less than £25,000, you might be restricted in your choice of possible mortgage provider.

Summary
Procedures for remortgaging are simpler than for an initial property purchase;
normally, only a basic property valuation is required for a remortgage;
borrowers need to be aware of all the possible costs associated with remortgaging.