With interest rates on the rise, now could be a good time to prepare for a REMORTGAGE, but the process requires effort on your part. Here are some helpful tips to get you started...
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In layman's terms, remortgaging is when you take out a new mortgage on a property you already own - to replace your existing mortgage. The aim? To save YOU money.
If your current mortgage deal is about to end or has already moved to a Standard Variable Rate then it's probably time to consider a remortgage...
1. Start the process 6 months in advance
Most lenders allow you to secure a new rate up to 6 months in advance. So if your mortgage expires as far as April 2022, you can lock in a lower rate NOW for the new deal to kick in at the end of your current mortgage term.
2. Check your credit score
A good credit score is a key component in lender decision-making, so downloading your full credit report is a great place to start. A go-to of ours is Checkmyfile.com, as it compiles data from all four credit agencies as opposed to one. This more detailed report will help your broker match you to lenders that you'll have a better chance of getting accepted by.
Checkmyfile.com offers a free 30-day trial, and you can cancel any time before being charged £14.99 per month. Download your full report HERE
3. Pick your date carefully Most mortgages have an early repayment charge. Remortgage during this period, and you could be hit with a hefty exit fee. That said, sometimes the savings to be made are worth paying the early fee. For example, you may have added significant value to your property since securing the current mortgage. This will mean you'll have lowered your Loan To Value and will likely have access to better rates. Always make sure you do the sums first OR speak to an adviser to explore what options make the most financial sense.
4. Know your property value To get the best rates, you need to get a view of what your property is worth. Don't second guess this as when, you apply for a mortgage the lender will perform an independent valuation to confirm the figure. Places like Zoopla and Right Move are a good place to start. Or even better, book yourself a free valuation with your local estate agent.
5. Play the field And no we don't mean dating. Working with a broker means you can access lenders that aren't available on the high street. We also re-check the market before you commit to ensuring you're not missing out on any new deals. It's all about saving you MONEY.
6. I'm self-employed
If you fall under the self-employed category or have become newly self-employed since taking out your mortgage, you will need to prove your income to remortgage.
Proving your income means you'll need to provide two years worth of financial records (business bank statements, personal bank statements, SA302/self-assessments) to evidence your financial position. Some lenders will consider this if you are newly self-employed and only have one full year of accounts. Again, it's worth speaking to a broker who can recommend which providers are most likely to approve your application.
Your Remortgaging Checklist
Have an up-to-date property value
Check your current mortgage details
Download credit report
Provide 3 months bank statements for any/all accounts that show salary paid in and bills paid out
Provide 3 months payslips
Proof of ID (passport/driving licence)
Provide utility bill dated within the last 3 months
+ Self-employed
1-2 years business bank statements, personal statements
Self Assessment
SA302 (produced by HMRC once you have submitted your self-assessment tax return)
Like any big financial decision, remortgaging should be treated with considerable attention. Please do your best to research the market and seek financial advice before making any financial commitments.
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