Remortgaging is a financial term that involves switching your existing mortgage to a new one, often with a different lender or on renewed terms with your existing lender. People choose to remortgage for various reasons, such as securing a better interest rate, releasing equity on their property, or consolidating debt.
In this blog, we’ll explore several ways to help you improve your approval chances when remortgaging.
If you would like to speak to an experienced and helpful team about your remortgaging situation, please see our contact details at the bottom of this article.
Key points covered to improve remortgaging approval chances include;-
- Assess Credit Score
- Understand Your Finances
- Reduce Debt
- Gather Documentation
- Choose The Right Lender
- Demonstrate Stable Employment
Assess Credit Score
Your credit score is really important and plays a large role in getting approved for a remortgage. It also influences potentially what interest rate you receive too. We would recommend that you keep close tabs on your credit score and when it comes to remortgaging that you have a copy of your credit report. Ensure you’re paying all of your bills on time. Reduce your credit card balances and avoid opening new credit accounts because each credit inquiry can temporarily lower your score.
Understand Your Finances
One of the main concerns of a lender is that you have a stable income and can therefore afford to pay your mortgage each month. Before applying for a remortgage, take a comprehensive look at your financial situation. Be sure to calculate your monthly income, including any bonuses or side income, and compare it to your monthly expenses. This way, you will have a clear understanding of your finances and it will help you to determine if a remortgage is feasible for you at this moment in time.
Understandably, debt that you have can be a cause for concern to a lender so we always advise, where possible, to clear this debt before applying for a remortgage. This will drastically improve your credit score and also reduce your debt-to-income ratio, which is a key factor in the approval process.
There are various documents that lenders will require when you remortgage to give them an idea of what your financial situation is. The documents included the likes of payslips, work related forms, tax returns, utility bills, valid ID’s and other bits and bobs to confirm addresses and the like. Having these documents ready in advance can streamline the application process and demonstrate your preparedness to the lender.
Choose The Right Lender
Some lenders have different criteria to others which may make you more inclined to choose a particular one. We would recommend shopping around on different lenders to find out what best services you and your situation. If you work with a dedicated mortgage broker like us then it certainly makes life easier when it comes to knowing what is good for you because we’ve got the knowledge in this area.
Demonstrate Stable Employment
A stable employment history can improve your remortgage approval chances. Lenders typically prefer borrowers who have been with the same employer for an extended period. If you’ve recently changed jobs, try to secure a new job in a similar field to show continuity in your career. For self-employed people, this is slightly different, so consistently with invoices and payments is a good way forward as well as tax returns and bank statements.
Get in Touch
Remortgaging can be a complicated and stressful process and we totally understand this. This is why we offer a customised and bespoke service to your needs. If you’ve read all of this and now feel like you need some support with your remortgaging then don’t hesitate to get in touch.
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