The most straightforward option on the table involves using your current lender and changing to another deal with them. They will write to you a few months before your mortgage expires, reminding you that the initial period is coming to an end and asking if you’d like to renew.
If you remortgage like-for-like with your current lender, there’s usually no need to go through the affordability process. That’s because they already have your details from the first application.
There are caveats to this, however. If a lengthy amount of time has passed, say, five years, they may wish to recheck your affordability to see if anything has changed. If you’re borrowing more, they could also perform an affordability check to see if you meet the criteria for the higher borrowing amount.
Should you decide to look for a new lender offering the best rate, you may instruct a broker. Mortgage brokers will scour the market and come back with the best options based on your requirements and the information provided to them.
For example, if your current mortgage is for £250,000 with £175,000 left on balance, but you want to borrow an additional £10,000, they will look for options amounting to £185,000 on the best available interest rate.
Before enlisting the broker’s help, it’s essential to check their terms and conditions. Some brokers charge a fee or take a percentage for their services. Other broker options are completely free of charge as they earn their money from the lender directly. Brokers tend to have access to more mortgage options than those available on the high street or comparison websites.
Of course, there’s always the option of approaching the lender directly for your remortgage. In this scenario, you will need to find the lender through online research using comparison websites or by going straight to the lender’s website (or high street bank or building society).
If you’re reasonably comfortable with the process, you may decide to go with a new lender directly. Using a comparison website allows you to measure each lender and see which offers the best interest rates and overall mortgage product.
Just remember that you’ll be treated as a new customer and will be required to provide the necessary documents. This means showing proof of ID, payslips, income and expenditure and having a hard credit check performed on your credit report.