‘Remortgage’ – even the word is boring, it’s no surprise that so many people leave this dreaded task to the last minute or let themselves fall onto their lender’s standard variable rates (SVR).
If you have just left full time employment to set up on your own as a freelancer or independent contractor you may also be concerned that your current deal may no longer apply.
It’s important to know that although you have been approved for a mortgage previously it doesn’t automatically mean you’ll be approved again. To help you navigate the hurdles and get the best deal, see the GIGLY remortgage checklist below.
1. Understand your current deal
Take the time to understand your loan details so you know what you have and what you are paying each month. Write down the answers on a pen and paper, or spreadsheet;
- What is your current mortgage rate?
- What is your repayment each month?
- What is the amount of loan outstanding?
- What type of mortgage is it? Is it a fix, tracker, discount or a “standard variable rate” (SVR)?
- Deal deadline. When does the current deal end?
- How long is the repayment term, eg, 25 years?
- When will the loan be fully repaid?
2. Check the deal deadline and repayment penalties
Most mortgages have an early repayment charge for the initial incentive period. If you remortgage during this period, you’ll trigger the charge and it can be thousands of pounds. Check if yours has an early repayment charge. If it doesn’t, you’re free to remortgage at any time. If it does, and you don’t want to pay the charge, remortgage for the next working day after your current mortgage ends and you’re free from penalties.
3. Dazzle the lenders with your credit score
One of the best ways to get the lenders on your side is to ensure your credit score is sparkling! Simple things like paying bills on time, closing unused accounts and ensuring that you’re registered on the electoral roll all help to reassure the lender that you’re a good candidate to borrow their money. See here for info on improving your credit score.
4. Watch your spending habits
Lenders like to see that you’re managing your money well but more importantly that you have enough money to repay them each month. So, in the lead up to your remortgage, ask yourself if that luxury spa break will make you look like a reliable borrower.
There are a few things you should (or shouldn’t) be doing in the weeks and months before you apply for a remortgage deal:
- Don’t apply for credit just before a remortgage
- Avoid erratic or heavy spending in the weeks before you apply
- Stay out of your overdraft
5. Dig out those mortgage files and prepare
Remember all the paperwork you had to get together when you applied for your last mortgage? Yep, you’ve got to produce it all again…
Your lender may want to see any, or all of:
- Your last three months’ bank statements
- Your last three months’ pay slips
- ID documents (passport and driving license)
- Proof of address (e.g. utility bills or credit card bills)
- If self-employed: your last three years’ accounts/tax returns
Getting the paperwork that the lender needs sent in one batch can speed up the process. It also reduces the chances of your application being reviewed by more people.
6. Rejected? Stop!
If you’ve been rejected – STOP! Don’t automatically call other lenders. Too many applications will mess up your credit score, instead, the first thing to do is check your credit file again. Could you have missed something?
GIGLY are always on hand to help guide you through this process. We know that you’re super busy and remortgaging isn’t top of your priority list so let us do the work for you.
Whether you’re looking for contractor mortgages, self employed mortgages or gig mortgages, GIGLY will pair you up with one of our FCA approved mortgage advisors who use the whole of market to match you with the best deal for your remortgage requirements. Meaning you will have access to over 100 lenders, we’ll handle all the boring paperwork and deal with the pesky lenders whilst you relax. And the cherry on top? We don’t charge for our mortgage service.