When you choose to remortgage you can save money on monthly repayments. However, as we preach to all our clients here at Remortgage Fast, the remortgaging decision isn’t one to be taken lightly. You need to be sure that you are getting the right deal. We have put together top remortgaging tips to help you.
You can’t afford to leave your remortgaging to the very last minute. This is because doing so might mean being moved to the Standard Variable Rates offered by your lender. Such rates are often higher and could mean paying thousands more on your loan. You should start the remortgage process at least 3 months before the end of your current term. This is the only way to be certain that you have fully explored your options. Don’t have 3 months? Contact us right away.
Consider all Changes to Your Personal Situation
For the best remortgage deal, you need to consider your personal situation and how it might have changed since you first secured your mortgage. Do you earn a higher or lower income? Do you have additional debt to service? Maybe you now have a child? When you have a proper handle on your personal circumstances, you can be better placed to figure out what qualifies as a good remortgage deal for you and what doesn’t.
Be Sure to Shop Around
Lenders compete heavily for clients. This is why there are hundreds of mortgage deals available in the market today. You would be doing yourself a disservice if you only consider offers from your current provider. Here at Remortgage Fast, we have made a name in helping people in Hampshire and beyond to find the best remortgage deals. We will help you shop around, analysing more than 90 lenders to find the best possible remortgage deal for you.
Improve Your Credit Rating before Application
All lenders analyse your credit score to ascertain for a fact that you are capable of honouring a mortgage deal. To improve your chances of getting approved, you need to ensure a good credit score. It is important that you check the rating before a provider does that, to avoid rejection. A good tip is to check your credit rating months before you start considering a remortgage. You should check your credit score every year at the very least. This will ensure you have ample time to correct any anomalies and make some much needed changes and improvements. Some of the things you can do to improve your credit score include: getting on the electoral roll, using and paying off a credit card to enhance your credit history, avoiding any credit card or insurance applications in the months leading up to your remortgage application and closing all dormant bank accounts.
Work Out the Overall Cost
When getting a remortgage deal, it is easy to think that you are guaranteed to get a better rate. However, after you have factored in the additional costs that come with remortgage, you may be worse off overall. Some of the costs you need to be wary about include:
- Legal fee: This is mostly the fee charged for conveyancing and the exact amount will be determined by the value of your property.
- Redemption fee: This is charged by the lender for closing your account at a specified date other than the normal end date for your current deal.
- Valuation fee: You will most likely be charged a fee for valuing your home. This is common on all new mortgage deals.
- Early Repayment Charge: If you repay your mortgage early, you could be charged fees ranging between 0 and 5% of your current mortgage balance.
- Transfer fee: This covers the cost of transferring money to your solicitor.
- Booking fee: For a lender to guarantee that they will honour a rate offered some of them will charge you a booking fee.
- Arrangement fee: This fee covers the lenders’ administrative costs.
Some of these fees cost as little as £50 while others can be as high as £1,000. Understanding the total costs before agreeing to a deal is very important.
Improve your Loan to Value (LTV) Band
Your new deal will be cheaper if you are in a low LTV band. If you currently owe beyond 60% of your home’s value on a mortgage, you should aim to bring it down as much as possible before your remortgage application is due. The major bands are 60%, 65%, 70%, 75%, 80%, 85%, 90% and 95%. The higher the LTV band you occupy the lower your chances of getting a lower rate. What can you do to improve your LTV situation? Commit to overpayments (within the limits approved by your provider) or pay off a portion of the mortgage as a lump sum if you are allowed to do so.
Don’t Hurry to Reapply After a Rejection
When you have been rejected for a remortgage, do not reapply instantly with a different provider. If you have too many applications, you will severely dent your credit report. When you have been rejected, the first thing you should do is to check your credit immediately to see if you there is something missing. If you were rejected two weeks ago, you will most likely be rejected now.
This is why here at Remortgage Fast, we place emphasis on starting as early as possible to analyse your remortgage situation with a qualified broker. There is a higher chance of avoiding a rejection when you seek advice. In the occasion that a rejection occurs, it will be easier to analyse what went wrong.
Remortgage Fast provides services to clients all across the Hampshire area including: Southampton, Portsmouth, Basingstoke, Gosport, Andover, Waterlooville, Aldershot , Farnborough, Fareham/Portchester, Eastleigh, Havant, Winchester, Fleet and Petersfield. Get in touch with us today to discuss your remortgage situation.