Remortgaging – Top Tips to Follow
Remortgaging your home can be a great option to find better mortgage deals and pay less on your home. However, it can also be a difficult task to sift through mortgage comparisons and choose which option is the best for you. These tips will help you find the best mortgage deals, making sure you save time and money.
1. Don’t assume your current lender is the best option
While it certainly is a good idea to contact your current lender for a mortgage quote, you should also spend a considerable amount of time researching other lenders and compiling a list of quotes so you can be fully informed. Comparing mortgage rates online is a great way to get a good overview of your options.
2. Reach out for professional assistance
With so many opportunities available for people looking to remortgage their homes, it’s easy to feel confused and discouraged. That’s why getting help from a mortgage expert or broker can be the difference between a good remortgaging experience and a bad one. Mortgage brokers are there to help you find lenders suited to your specific needs and borrowing history. They’re experienced in researching the entire market and will work to get you the best mortgage deal possible.
3. Give yourself enough time
Most experts and online sources will advise you start your remortgaging search about six months ahead of time, and this is no exaggeration. Giving yourself between three and six months to prepare and search for a new mortgage ensures that you’re aware of when competitive deals hitting the market, which means you could end up saving thousands of dollars.
If you make a successful application to a lender, the deal will come with an expiration date. During this period of time you can wait and consider the offer without worrying about the rate changing. Getting a good mortgage deal months in advance will protect you against rising rates. However, if rates rise and you want to try to get a new deal, you will likely have to pay your remortgaging fees all over again.
4. Keep up on your credit score
Before you submit a remortgaging application to a lender, it is very important that you check your credit history. This gives you the opportunity to investigate and correct any potential mistakes affecting your score.
Your credit history is comprised of all your credit cards, loans, mortgages, overdrafts, and even payment contracts, such as those for mobile phones or utilities, over the past six years.
If your credit score is currently weak, it’s probably not a good idea to try to remortgage because unsuccessful applications can affect how future lenders view your application.
There are three major credit reference agencies in the UK, Callcredit, Equifax, and Experian, which will all allow you to look up your credit history for free.
5. Don’t apply to every lender out there
When you make an application to a lender, they search your credit history and this search remains on your credit report. The problem is that lenders can also see when someone has searched your credit report and if you have lots of searches, it doesn’t look good. Rather, it looks like you’ve reached out to every lender in the market and made continuous failed applications.
Instead, try to keep it to three or less applications, which will also be far more affordable for you.
6. Make sure you borrow the exact right amount
It can be tempting to think that all you need is rough estimate of how much you still owe on your mortgage. However, doing this can mean you forget to calculate any additional admin or early repayment charges.
If you underestimate how much is owed, you’ll end up with a shortfall, and overestimating will leave you with a more expensive remortgage.
To avoid this, phone up your current lender directly and ask for the exact figure of what you owe and also ask about the fees associated your mortgage.
During this time, you should also get an accurate estimate on your property’s worth and the rates associated with it. The lender will also be sending out an independent valuer to verify you have given an accurate valuation.