If you are thinking of remortgaging there are a few things you should keep in mind, whether you are remortgaging for a better deal for the same amount of money or wanting to lend more to consolidate debt or fund home improvements.
If you are only a few months away from remortgaging you might want to reconsider taking out any new loans or credit cards, as any debts will reduce your affordability and possibly make it difficult for you to even remortgage for your outstanding balance on your current mortgage. So not the perfect time to put a new car on finance! Definitely stay away from pay day loans as many lenders see these as a sign that you have poor money management.
It may sound awful but mortgage lenders see children as debts, with many lenders reducing your affordability slightly for every child you have. So if you are thinking of having another child soon it might make a difference if you remortgage now rather than later to make sure you can lend as much as possible. Of course do keep in mind that when you have a child your financial circumstances will change and make sure you will still be able to make the repayments based on this.
This goes without saying for all times in your life but especially when you are thinking about getting a new mortgage make sure you are paying everything on time and not missing payments. The mortgage lender is making a risk assessment with every application they approve and if you’re not bothered about paying your gas bill what’s to say you’ll pay your mortgage?
At application stage a lender will usually ask for proof of income taking the form of; payslips and P60’s for employed people and accounts or SA302’s and tax year overviews for self employed people. I can imagine many people’s payslips end up in the bin or being put through the wash with your work trousers, but make sure you keep them in a safe place for when your mortgage lender requests them. If you are self employed you may want to request your SA302’s from HMRC early on, as these can take a few weeks to be posted out to you.
Another thing that a lender often asks for is to see your last three months bank statements so it might be time to start cleaning up your spending habits. Try and get out of your overdraft and reduce unnecessary spending e.g gambling, drinking, clothes purchases etc so you are not penalised for this. With all this in mind once you are ready to remortgage make an appointment with one of our independent mortgage advisers who can access deals across the whole market.
Sammy McCann BSc (Hons), Cert CII (MP)
12th September 2016