How soon is too soon to apply?

Newnoel

My brother's mortgage is up for renewal on 31/12/20 - just over 6 months away

He is in full time employment, but concerned about job security, and wants to start the remortgage process now while he still has a full time job. Is it too soon? Or should he wait another 3 months or more?

ontheedgeofmyseat

Newnoel said:

My brother's mortgage is up for renewal on 31/12/20 - just over 6 months away

He is in full time employment, but concerned about job security, and wants to start the remortgage process now while he still has a full time job. Is it too soon? Or should he wait another 3 months or more?

You can re-mortgage whenever you like, but if you are in a fixed term, you will have to pay early redemption costs. This will depend on his mortgage agreement with the lender. 

Newnoel

ontheedgeofmyseat said:

Newnoel said:

My brother's mortgage is up for renewal on 31/12/20 - just over 6 months away

He is in full time employment, but concerned about job security, and wants to start the remortgage process now while he still has a full time job. Is it too soon? Or should he wait another 3 months or more?

You can re-mortgage whenever you like, but if you are in a fixed term, you will have to pay early redemption costs. This will depend on his mortgage agreement with the lender. 

Question is slightly different --- is it too early to apply now to secure a new rate from 31/12?

ontheedgeofmyseat

Many remortgage offers are valid for between three and six months from the date they are issued. That means even if, for example, you've got five months left to run on your existing deal, you can apply for your new mortgage now.

Usually you do not have to pay any fees for redeeming your mortgage a little earlier, for example two to three months. I am not sure if you have already calculated this in the above date?

With regard to job security, this may still be checked at a later date, if he only renews in six months. It depends on the lender. 

jamielutz1987

@Newnoel It also depends on what his fallback options are.

If he's with a large mainstream lender like Nationwide, Barclays, etc etc then even if his employment circumstances change, he should still have access to competitive interest rates through a product transfer which involves no affordability checks. In that case, in his place I'd leave it for later.

If he's with a higher rate or smaller lender like Bluestone, Aldermore, small building society, etc then in his place I would apply for a remortgage sooner rather than later. Of course lenders can always ask for updated payslips etc prior to completion.