Remortgaging – Do You Qualify?
For most people, the main aim of remortgaging is to look for a lower interest mortgage deal to replace the existing mortgage hence lower the monthly repayments. However, the remortgage deal you get will depend on your credit rating, the loan to value, your income and how much debt you have.
When thinking about remortgaging it is worthwhile to assess these four situations before you take the step to remortgage.
Credit Rating – A bad credit will create serious problems when remortgaging. Although it is still possible for you to remortgage, you will probably not get an attractive rate. If you do have bad credit then it is advisable to pay off some debts first and improve your credit score before you remortgage.
Loan To Value (LTV) – The loan to value is the remortgage loan amount you want to borrow divided by the value of your home. The higher the value of your home and the lower the amount you want to borrow, the better the interest rates available to you. So for example, the value of your home is £150,000 and the amount you want to borrow is £75,000 the loan to value is 50%. The lower the loan to value percentage, the better deal you can get.
Income Level – The higher your salary the better deals you can get. This is because the lender will be able to see that you have a better chance of repaying back the mortgage as the payments will be affordable. Most lenders will lend up to 4.5 to 5 times your income level as a loan amount.
Debts – If you have many debts then this could also cause problems in remortgaging. If you are in debt then this could pose a greater risk to lenders as you have other debts to pay off in addition to the mortgage.
You don’t have to be perfect in all four areas but improving on them will help you get the best deal possible.
By speaking to one of our mortgage advisors they will be able to assess your situation and provide you with the best advice on what actions to take. Our mortgage advisors will guide you in the right direction and make sure you take the best possible route to a successful remortgage.
Contact us on 0800 954 0965 or fill in the form on the right
