Remortgaging has become much more challenging and complex in the last few months due to new Government regulations that stipulate that borrowers must not be allowed to take on more debt than they can afford. This means that remortgage deals will only go to borrowers who can prove their financial well being and lenders will want a full audit of your incomings and outgoings. Here is a quick list of our top ten ideas to help you get the home loan you need.
1. Organise Your Finances
If you take an organised approach to your personal finances, reviewing your mortgage deal once every three to five years and then planning any possible remortgage in a systematic way, it will be financially rewarding. Often, the difference between people with a comfortable standard of living and those without isn’t so much their salary as the ability to organise financially.
2. When In Doubt, Ask…
It goes without saying that when we are dealing with personal financial decisions of the magnitude of a mortgage or remortgage, one should always ask for advice. There is a wide array of products and rates on the market at any one time and the sheer level of choice can be overwhelming. There are also countless web pages full of free and for the most part reliable and impartial advice, and if this isn’t enough, you can always pay for a session with a mortgage qualified independent financial advisor.
3. Know Your Loan
Before you start the process of remortgaging, look at your existing deal. Are there any hidden pitfalls, early repayment or exit fees? Finding this out will give you a clue as to how expensive the whole transaction will be ultimately.
4. Look For Hidden Costs
There is no point in switching to a mortgage that you hope will save you money in the long run if the fees, charges and other costs actually wind up forcing you to spend more. Make sure you know exactly how much the remortgage will really cost you before you accept the deal.
5. You Might Be On First Name Terms, But Don’t Be Fooled…
Whilst you lender might pour you a coffee when you have a consultation, or seem friendly and nice, remember that they work for the lender and the lender takes care of itself. Similarly, if there are extras and benefits in the deal, rate caps, cash back offers and the like, be certain that the lender will have already included a way to claw back the money later on with interest. This isn’t to say that you should reject any benefits, just know them for what they are.
6. Look For Remortgage Packages
You might find that there are specific mortgage offers tailored to you. The majority of offers apply to anyone who hits the eligibility criteria for a mortgage, but there are some packages that are specifically designed for borrowers in your circumstances and they might be more flexible or cheaper in the long run.
7. We All Love Our Homes But…
If you over inflate the price or the perceived value of your home, you are bound to be disappointed sooner or later. Lenders will lend based on what they think the property will sell for, not what you would like it to sell for.
8. Your Credit Score Is As Important As Your Property Value
Credit checks are an inevitable part of life in the 21st Century. We are now living in a time when our entire financial history can be purchased and examined. With this in mind it’s important to make sure you know exactly what has been written about you before the lender does. You can get your credit score from Equifax, Experian and Call Credit, along with advice about how to improve your score.
9. Get Your ID In Order
Your lender will want to see that you are who you say you are (countless frauds are attempted every single day) and that you actually own the property you are hoping to remortgage. If you have your proof of ID, utility bills, deeds to the property and Council Tax bill organised before you even get started, you will save yourself stress in the future.
10. Get Insured
Lenders look favourably on the insured. If your mortgage is protected against untimely death, long term illness, redundancy and other unforeseen problems, you will make yourself a less risky prospect in the eyes of lenders.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. SECURING SHORT TERM DEBTS AGAINST YOUR HOME COULD INCREASE THE TERM OVER WHICH THEY ARE PAID AND THEREFORE INCREASE THE OVERALL AMOUNT PAYABLE. YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.