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7 Things To Do Before Remortgaging Your Home

REMORTGAGING | 30.05.2017

Before you leap in and apply for a new mortgage deal, here are 10 things you must do

Whether you want to free up equity for home improvements or pay off your mortgage sooner than originally planned, remortgaging your home can be a great way of transforming your finances. But before you leap in and apply for a new mortgage deal, here are 10 things you must do:

1. Determine how much of your home you already own

Do some research to find out how much your property is worth and then calculate how much equity you own. You can obtain this figure by dividing the amount you still owe by your home’s current value. Next, times this figure by 100 and that’s your LTV (loan-to-value). For example, if you owe £150,000 on a property worth £200,000, you have a 75% LTV.

2. Assess your credit rating

Your credit rating may have changed from the time you got your last mortgage and if so, it’s important to be aware of it when remortgaging. If you’ve paid all your mortgage repayments on time so far, this can certainly work in your favour. You lender will also want to look at your attitude to other lines of credit such as car finance and consumer loans. Whether you’re looking at your credit file through Equifax, Experian or another credit referencing website, ensure that all your accounts and repayments are correctly listed. Also look out for any defaults or issues you may have to explain. Don’t forget to also make sure you’re on the electoral roll at your current address.

3. Check remortgage rates early

It’s wise to start looking at potential mortgage deals about 12 to 14 weeks before you want to complete your remortgage deal. With rates changing regularly, this time frame gives you more choices and a greater ability to compare prices. If you don’t have much time before you need to remortgage, don’t worry. A mortgage broker will help you compare the best deals currently on the market before guiding you through the entire mortgage application process. You may feel tempted to stick with your current lender to save time and energy, but you could save thousands by switching to a different provider.

4. Consider securing a better rate before your current deal ends

If you still have a few months left of your current mortgage deal and you’re unable to switch early, you could secure a better rate now to be used later. Reserving the perfect deal can be a particularly smart move to prevent missing out if it expires by the time your current contract ends. There is of course a risk that better deals could arise at a later date, but locking yourself into a deal you’re happy with could give you security and peace of mind.

5. Determine how much you can borrow

If you’re remortgaging to borrow more money, it may be wise to speak to a mortgage broker to determine how much cash you can access. There once was a time when lenders would multiply your main income by five and lend you this figure, but the process has become much more complicated. Lenders will look at everything from your credit rating to your average monthly expenditure before deciding how much to lend you.

6. Keep early repayment fees in mind

Many mortgage products involve early repayment charges and if you remortgage during this period, you may face a large fee. If your mortgage does have an early repayment fee, work with your mortgage broker to assess whether it’s worth your while. In some cases, it can still be worth remortgaging because you’ll save more in the long run.

7. Prepare to jump through more hoops if you’re self employed

If you’re self employed, you may find it harder to remortgage your property than someone who is in full time employment. You’ll be expected to provide your lender with at least two to three years of accounts and in many cases, these will need to be signed off by a chartered accountant. You also may need to provide tax returns from the last few years. Most lenders will assess you on net profits rather than turnover, so your finances will need to be in excellent shape. If you’d like help remortgaging your home, please get in touch with the team at TaylorMade. We can help you from the initial mortgage application stage right through to completion.
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