Arranging the remortgage of your property can often seem daunting at first. However, a qualified and experienced mortgage advisor can take away much of the guesswork in mortgage switching and take the time, effort and hassle away from you - helping you get the best mortgage for your situation.
It's not just a trend either - people are increasingly using mortgage brokers to mortgage switch - 7 out of 10 people choose to use a mortgage advisor, according to ThisisMoney.co.uk.
Think of Mortgage Switching in the same terms as your car insurance. Most people will shop around every year when they receive their car insurance renewal and will often change providers for the smallest of savings. A mortgage switch is similar, only you are changing your mortgage provider.
To make your journey as seamless as possible, take these top tips to get ready for your remortgage from trufe.
How Much on Average Can I Save?
It’s hard to say without knowing and understanding your current situation, but often remortgaging can be one of the biggest money saving exercises you could undertake. We have helped clients save hundreds of pounds by asking us to review their current mortgage deal, so get in touch to see what potential saving you could be making each month.
Start Your Process Early – Around 3-6 Months in Advance
Many people find themselves locked into a mortgage deal with high penalty fees and feel they are stranded until they come to the end of their current deal. This may not always be the case, sometimes it may be financially beneficial to pay the ERC fee to obtain a cheaper rate, or look at the possibility securing another deal early in preparation for when you are free to change lenders, thus saving you paying any penalty fees or even dropping onto your current lenders standard variable rate for a period of time.
We would recommend working with a mortgage advisor to help establish a seamless transition between lenders. See if you can #mortgage switch today, and we will see what's available from your current lender against the whole of market, to ensure it is worthwhile making the switch.
Does a Change in Circumstances Affect Your Mortgage?
If your situation has changed, you don't necessarily have to wait until the end of your current deal. Depending on the mortgage you currently have, there may be other options available, which could either help save you money, pay your mortgage off faster, raise money for debt consolidation, make adjustments to your mortgage during a divorce or moving house.
Again, a mortgage advisor is best placed to help guide you through the options available or help prepare for when your fixed term comes to an end.
Check Your Credit Score.
Your credit score can have a substantial impact on the interest that lenders charge. If it is low, you could wind up paying substantially more than you want. Be sure that you consistently pay your bills, loan repayments and overdrafts from now until the point you apply for the remortgage.
To check your credit score, we recommend these:
Its always a good idea to keep tabs on your credit score and will help avoid any surprises.
At trufe. we use Credit Expert to complete a soft search on our applicant's behalf as part of our service, to help further ensure we are specifying the right mortgage solution. This can save a lot of time, as we have a clearer understanding of your financial situation, which helps us make better decisions on your behalf.
Can you Borrow the Right Amount?
As with any application to borrow money, a remortgage is no different, all lenders will assess your current financial circumstances, along with their own individual lending criteria which may have an impact and limit the amount of money they will lend you
As a starting point, please try Trufe's 'How Much Can I Borrow' calculator as a guideline to see how much you could potentially borrow on your current earnings. This will also give you an indication of how much your new home will cost.
It can be a complex calculation, so your Mortgage Advisor will ensure everything is properly accounted and a genuine picture of your borrowing is established.
Being self-employed doesn’t necessarily mean you cannot achieve your mortgage goal. As, a general rule, lenders request three years evidence when assessing the affordability and sustainability of your new mortgage, this can be in the form of full audited accounts, SA302’s & Tax Overviews. However, not everyone’s situation is straightforward, you may not have been trading for three years, or you may have only recently gone self-employed.
That’s why it’s always worth speaking to one of Trufe’s specialist mortgage team. We have years of experience in helping our self-employed clients and which lender may best suit to their situation and requirements.
See if You Can Drop an LTV Band
Dropping an LTV band before you remortgage can help you access cheaper rates. The current bands are in 5 per cent intervals, running from 95 per cent down to 60 per cent.
If you're on the cusp of a lower band, it's worth your while putting your energies into repaying a little extra before you apply for a remortgage. You can also take steps to increase your home's valuation, as this too will push down the LTV ratio.
A mortgage advisor would help ensure your calculations are correct and be able to advise on the best course of action to establish the right lender for your LTV and what adjustments you could make to improve the mortgages offers available to you.
Get a Property Valuation to Lower Your LTV Band
Getting a property valuation is another step you'll need to take before deciding whether to remortgage. Valuing your property gives the lender peace of mind that they have sufficient collateral to cover the money they lent out should you fail to make repayments.
Your selected lender may charge you for this, or include it as part of the mortgage process. Sometimes this is completed without a visit to the property.
Sort out Your Finances
Before you apply for a mortgage, you want your finances to be in good shape. If they're not, then lenders will be less willing to part with cash.
Avoid things like applying for credit just before a loan or heavy spending in the weeks before you remortgage. Lenders usually require three months of your bank statements.
At trufe. we are also keen to advise our customers to be open and honest about their financial situation. Your mortgage broker should help you focus on the priorities to successfully demonstrate your situation.
Get Your Paperwork Ready
Lenders want to know that you're good for the money BEFORE they lend to you. For this reason, your advisor may ask for all kinds of documents and evidence, including:
Proof of current address
Last three months of payslips / P60
Latest three months' bank statements
HMRC Tax Calculation (SA302 with corresponding Tax Overview – Last three years if available)
Collect all the paperwork you might need in advance if possible.
Working with a mortgage broker can help speed up this part of the process and put your mind at rest as they deal directly with the lender, supplying and checking your documents.
Rejected? Don't Just Reapply.
If one lender rejects you, don't automatically try your luck with another. A rejection from one lender can adversely impact your credit score. Multiple rejections can harm it considerably.
If you get rejected, your lender will freeze what you're doing, check your credit file, and address any issues that might be holding back your remortgaging ambitions so you’re in a better position to apply three or six months down the line. These things can take time.
As you can imagine, a mortgage advisor will be invaluable at this stage. However, if you have been upfront about your situation, there shouldn't be any reason that you should be rejected when following the advice of your broker. Either way, your mortgage advisor can search the market taking into consideration the reason your application failed.
How a Mortgage Broker Will Make it Easier
You can approach your existing lender or bank to talk to them about the products and services that they offer, however if you wanted to visit more than one bank, you would have to approach each bank separately to compare the mortgage rates available to you.
A whole of market broker has access to hundreds of mortgages from well-established and specialist providers, some of which are exclusive to brokers. They also know your personal situation meaning that they can find the right mortgage for your circumstances.
trufe. is a trading name of Green FS Ltd (FRN 833558) which is an appointed representative of HL Partnership Limited, who are authorised and regulated by The Financial Conduct Authority..
The Financial Conduct Authority does not regulate commercial lending, secured or unsecured loans and some forms of Buy to Lets. Equity release includes Lifetime Mortgages and Home Reversion Schemes. We can advise and arrange Lifetime Mortgages and will refer to an approved specialist for Home Reversion schemes.
Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
Green FS Ltd is registered in England and Wales with company number 11605501. Registered office address is trufe. The Leeming Building, Ludgate Hill, Leeds. LS2 7HZ.
The information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
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