If you’re remortgaging to a new lender directly, you’ll find the experience slightly different depending on whether you remortgage with a traditional lender or an online lender like Molo. The key difference is that traditional lenders will usually ask you to fill out paperwork and to book an appointment to speak with them before they review your application. Online lenders won’t – at least, Molo won’t (we can’t speak for every online lender!) But in either case, the application process is broadly similar.
1. Check when your deal’s coming to an end
Fixed-term mortgages are currently very popular – particularly since mortgage rates are so low by historical standards – as they guarantee your rate won’t go up. But they’re time limited, usually to two, three, five or ten years. And when they end, you’ll be transferred to the lender’s more expensive Standard Variable Rate deal. So you’ll want to make sure that you know when your fixed-term deal’s going to end.
You’ll find your current mortgage deal’s end date written on your mortgage offer document. And if your lender has an online platform, you should also be able to find this information there.
It’s usually recommended that you start to look at remortgaging around three months before your current mortgage deal is due to end. This will give you plenty of time to do your research and complete the application process.
2. See what lenders are offering
With over 100 lenders and tens of thousands of mortgage deals to choose from, finding the right deal might seem a little daunting. But you can save yourself the trouble of visiting each lender directly by using a comparison website. There are lots to choose from, and you’ll probably be able to name a few off the top of your head.
No matter which you choose, you’ll be asked to enter a few details, commonly including:
- How much your property is worth
- Your current mortgage balance
- Your remaining mortgage term
- Whether you’d like a repayment or interest-only mortgage
- Whether you’d like a fixed or variable rate deal
If you’re remortgaging a buy-to-let property, you may be asked if you’re operating as a limited company or an individual, since this will affect the types of mortgages available to you.
You’ll then be shown a list of deals that you may be eligible for, which you can order by initial term cost, monthly repayment or rate. This should help narrow down your options, at which point you can start to approach lenders directly.
However, bear in mind that some lenders offer exclusive deals via comparison sites and some offer exclusive direct-only deals. So you may want to consider checking both the direct and comparison site versions of the deals you’re interested in.
3. Check if you’re eligible
Before you submit your mortgage application to the lender, you’ll first need to check if you’re eligible. Each lender has its own eligibility criteria and they’ll reject your application if you don’t qualify.
Eligibility is typically based around:
- Your buyer status (eg. first time buyer or using a Special Purpose Vehicle)
- Your personal details (eg. age and residential status)
- Your financial circumstances (eg. income and credit history)
- The type of property you’re buying
At Molo, our eligibility criteria is clear and straightforward. But you might have to dig around a little to find out what some other lenders require.
4. Apply to the lender
Remortgaging is a quicker and less involved process than getting your first mortgage. And if you choose to remortgage with an online lender like Molo, you should find the experience very simple indeed.
Using an online mortgage lender has the advantage of avoiding:
- Printing out, filling out and scanning paperwork
- Waiting to receive documents through the post
- Having to book an appointment before you can apply
- Waiting longer times to receive a lending decision
The process of remortgaging usually takes four to six weeks, if you’re applying to a traditional lender. It can be quicker if you’re applying to an online lender.
