Whilst getting a mortgage is not quite as easy as it was several years ago, confidence is on the rise and we’ve seen a steady and promising increase in mortgage approval numbers over the past year. This is great news for first-time buyers and current homeowners looking to buy a new property or remortgage an existing one. Now, how does one go about getting a better deal by remortgaging? Well, there are three simple steps you can take to make you an attractive borrower and increase your chance of success.
Talk to Us!
As an Independent Financial Advisor we are best placed to provide the most up-to-date professional help and advice to anyone looking to remortgage. When borrowing any significant sum of money, it is really important to discuss your finances and options with an impartial expert before making any decisions.
Advisors who work for specific lenders can only recommend their employer’s products, whereas an at The Mortgage Hub we are not affiliated with any one lender. Make an appointment with us before applying for anything and we will advise you exactly what to do to maximise your likelihood of being approved for a remortgage and how to find the best deals out there.
If your credit history is less than perfect, we can offer tips on improving your credit. We might also have access to exclusive mortgage deals and be able to recommend the best lenders for self-employed applicants and those with poor credit history
You can read more about the benefits of working with an Independent Financial Advisor like The Mortgage Hub here.
Ensure you have an attractive application
This always surprises a lot of people, but something as simple as not being on the Electoral Roll can have a huge impact on your borrowing success. Essentially, lenders want to make absolutely sure that your name can be officially linked to your address. Every detail needs to match perfectly.
You should also check your credit file. Choose the main agencies, such as Experian, Equifax, and CallCredit to verify that all is well. If there is any incorrect or strange information, ask questions and ensure errors are fixed.
Opening a new credit card will help when applying for a remortgage as long as you have this in advance and not doing several credit checks close together. Start spending a little money on it—everyday things like groceries, petrol, etc—and pay off the balance in full at the end of each month by Direct Debit to ensure no late payments. It may seem pointless, but it looks great to lenders. They like people who borrow money, naturally, because it allows them to assess your spending habits and history, and they love responsible borrowers who pays back their debts quickly.
If at all possible, avoid changing jobs, becoming self-employed, or moving to a different rental property for at least six months to a year whilst trying to get a mortgage. Stability are steady income are key to lenders—they don’t like change or uncertainty!
Scrutinise your finances
Before applying for a remortgage, you should take a close look at your finances and do your sums. This includes income, outgoings, essential spending and financial commitments, current debts, and non-essential spending habits. Lenders will go through these figures in detail, and they like borrowers with less debt who do not appear to live above their means. You will be considered higher risk if there is a small gap between earnings and disposable income after all essential outgoings are taken care of, so it’s good to start altering your spending habits in a way that will appeal to lenders.
You will need to also look at your existing mortgage figures. What is the value of your current property? What is the loan-to-value of your home? How much do you need to borrow? Knowing these figures will enable you to determine your likely deposit. The best mortgage deals are available to applicants with bigger deposits, ideally 40% and above. However, it’s still possible to get really good deals with deposits of 25%. Even with a smaller deposits, mortgages are available, but the rates are not as favourable as those available to higher deposit applicants.
As well as loan-to-value, it’s also important to consider fixed rate periods and the term of your mortgage. Fixed-rate terms of two years will provide better rates than five-year fixed rates. However, fees are attached to mortgages so you must consider these extras to determine how cost-effective each option is overall, not just in the short term. The mortgage deal with the lowest rate may not be the bargain it appears to be when you work out the total cost.
These are the types of scenarios and confusing situations and an independent broker can help you work though to find the very best remortgage deal for your home!
The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.