Are you looking to remortgage? Here are My Contractor Brokers top tips to ensure you get the most out of the process.
1. Ask yourself why you need to remortgage
If you find yourself dissatisfied with your current mortgage deal, it may be worth considering remortgaging for a variety of reasons. One of the primary motivations is the potential for significant savings. By exploring different mortgage options, you may discover more favourable interest rates or terms that can lead to substantial financial benefits in the long run.
Another advantage of remortgaging is the opportunity to secure more flexible terms. Perhaps your current mortgage doesn’t align with your changing financial circumstances or lifestyle. Remortgaging allows you to customise your mortgage to better suit your needs, whether that means adjusting the repayment period, switching from a variable to a fixed rate, or vice versa.
Additionally, remortgaging can provide a means to release equity from your property. This can be particularly useful if you’re looking to fund home improvements, consolidate debts, or invest in other ventures. By tapping into the equity, you’ve built up in your home, you can access a lump sum of cash that can be used for various purposes.
However, it’s crucial to approach remortgaging with careful consideration. It’s not always advisable to switch mortgages, especially if you already have an excellent deal in place. Factors such as having a small mortgage, a poor credit history, worsened financial circumstances, or high early repayment charges can make remortgaging less favourable. Before deciding, it’s essential to conduct thorough research and evaluate your financial situation to ensure that remortgaging is the right choice for you.
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2. Check your budget
Similar to when you initially obtained your mortgage, lenders will assess your affordability when considering a remortgage. They will examine your income and expenses to determine whether you can comfortably manage any changes to your mortgage. To position yourself favourably for a remortgage, it’s crucial to review your budget and have a clear understanding of what is financially viable for you.
By carefully analysing your income and expenses, you can determine how much you can comfortably allocate towards your mortgage payments. This will help you avoid any financial strain and ensure that you can meet your obligations without difficulty. It’s also a good idea to consider any potential changes in your financial situation, such as upcoming expenses or changes in income, to ensure that you can still afford your mortgage in the long term.
3. Take steps to improve your credit score
Your credit score plays a significant role in the mortgage application process, including when remortgaging. Even if your credit score is already in good shape, it’s worth taking steps to improve it further before applying for a remortgage. A higher credit score can potentially grant you access to more favourable interest rates and terms, saving you money over the life of your mortgage.
There are several actions you can take to improve your credit score. These include paying your bills on time, reducing your overall debt, and keeping your credit utilisation ratio low. It’s also important to review your credit report regularly to ensure its accuracy and address any errors promptly. While small fluctuations in your credit score may not have a significant impact, consistently working towards improving it can yield long-term benefits.
4. Remortgage at the right time
Timing is crucial when it comes to remortgaging, especially if you’re currently on a fixed-rate mortgage. It’s essential to be aware of when your fixed rate is due to end to avoid automatically transitioning to your lender’s standard variable rate, which may result in higher interest payments. Setting a reminder six months before your fixed rate expires allows you ample time to explore the market, compare deals, and find a remortgage option that aligns with your individual circumstances.
However, it’s important to note that switching your mortgage deal before it expires may incur early repayment charges. While these charges can be significant, it’s worth considering them in the context of potential long-term savings. In some cases, paying the early repayment charge may still be financially beneficial if it results in lower interest rates or more favourable terms.
5. Get your paperwork in order
Before approaching lenders or mortgage advisers, it’s advisable to gather and organise all the necessary paperwork. Having your documentation in order will streamline the application process and make it easier for lenders to assess your eligibility. A mortgage adviser can assist you in compiling the required paperwork, but being prepared yourself will demonstrate your commitment and readiness to proceed.
Some essential documents to have on hand include details of your current mortgage, such as the type of mortgage, current interest rate, remaining term, and monthly payments. Additionally, you may need to provide proof of income such as your current contractr, bank statements, and identification documents. By having these documents readily available, you can ensure a smooth and efficient application process.
6. Check lender deals
When considering a remortgage, it’s worth exploring deals offered by your current lender. They may have favourable options available exclusively to existing customers. However, it’s also important to keep an eye out for deals from other lenders. Mortgage advisers often have access to deals that may not be readily available on the high street. Consulting with a mortgage adviser can help you navigate the market and identify the most suitable options for your specific needs and circumstances.
7. Get professional advice
When it comes to remortgaging, seeking professional advice is highly recommended. Especially as a contractor. A seasoned mortgage adviser possesses the expertise and knowledge to navigate the market with ease. They can work with lenders and their specific mortgage products, providing access to exclusive deals that may not be readily available elsewhere. Their guidance can prove invaluable in securing the right remortgage terms for you.
In addition to helping you find the best deals, mortgage advisers can assist with paperwork, assess your affordability, and provide insights into the optimal timing for your remortgage. Their expertise ensures that you make well-informed decisions aligned with your financial goals, resulting in a successful and stress-free remortgaging journey.
Don’t hesitate to leverage professional expertise to make the most of your remortgage. If you’re considering remortgaging, we have a team of expert mortgage advisers ready to assist you. Contact us today for a free initial consultation to get the ball rolling. We look forward to helping you navigate the remortgaging process and achieve your financial objectives.