Once you have made the decision to go investigate a remortgage, your next step should be to make sure you fully understand what will happen and what you need to do. Just to recap, a remortgage is worth considering if, for example, you:
- Want to release equity in your home
- Your current fixed rate deal is finishing
- You want to switch to a better deal
- Your circumstances have changed
Remortgaging is not for everyone though, so make sure you understand if it is right for your circumstances. You’ll find another useful blog on our website that will help you determine this.
First steps to remortgaging – know where you stand
Before you go any further it’s vital that you know what the new mortgage will mean in relation to your current situation. There are a few things to be 100% certain about.
Set a date
You can change it later if needs be, but for now, decide on a fixed date to change your mortgage. This is so you can have a milestone point for information – see the next point for a good example of why. If you are on a deal this is ending or similar, then the day after it ends is a good starting point.
How much do you owe your current lender (if anything)
Sometimes people are not fully aware of the outstanding amount on their mortgage. This is perfectly understandable. Your mortgage is one of those bills that just sort of fades into habit. If you contact your mortgage provider, they will be able to give you an exact figure for the outstanding amount. Ask them for the amount on the specific date you decided. That way you know exactly what the cost will be.
Get a grip on charges and fees
There will probably be some fees for moving your mortgage. Again, ask for the exact amount from your provider. Usually, there will be either one or both of:
- Early Repayment charge – If there is one, what it will be on your change date?
- Exit/Admin fees – there will almost certainly be a charge for releasing the deeds. These vary quite considerably and can be hundreds of pounds
One of the mistakes people sometimes make is not fully understanding these points and then finding that, when they come to look at the remortgage, there is not quite as much money as they thought.
Remortgaging next step – Know where you will be
After looking at the points above you should be in a position to be able to make a decision to go ahead. Now you need to know where you will be financially after the change.
All the following will be reliant on you knowing what is available so, to really get a good view of your options, you need an expert to help you.
Find the best deal.
There is a good chance you will have multiple options, but not all deals are the same. Small details about charges and fees need to be part of your decisions. The devil, as always, will be in the detail so really get to know what is on offer.
Understand the numbers in context.
Once you know what is on offer make sure you fully understand:
- What the monthly commitment will be for the term of the mortgage
- What you will potentially gain financially
- What will happen if your circumstances change
Once you are confident with these you can go to step three.
Remortgaging the penultimate step – get your finances in order
A remortgage is just like a mortgage in that you need to be able to demonstrate you can afford it and that you are a trustworthy, and creditworthy, applicant so:
Check your credit record with one of the credit score companies.
These are useful for seeing where you stand with your credit at the moment. Hopefully, you will come up with a good score already but if not, now is the time to sort that out.
Fix any financial areas that need sprucing up.
There are some things that reflect badly on your application. Clearing them up now will not only boost your chances of a mortgage, but it is also generally good advice to improve them.
- Reduce your borrowing if you have any
- Start to pay your credit cards in full every month
- Clean up any address and ask for any old associations (such as ex-partners or housemates) to be removed if needed.
- Do not take any payday or similar loans
Gather your evidence
You will need payslips to prove your employment status. You need to also make sure you are on the electoral roll and have bank statements.
Talk things through with us
We will help you with the right paperwork and application process. If you are self-employed or a company director, for example, we need to look at the best options for you. As a rule, using a specialist will make your application more likely to succeed.
While this list looks a lot, in fact, it can all happen very quickly, and you could find yourself with the remortgage solution you need in a short space of time.
As always, we are here to help so let’s chat.