Do you enjoy ‘Min Maxing’ things in your games, finances and life? Do you enjoy to optimise where possible? We discuss just how to achieve that when looking at Your Mortgage today in this brand new news article by Mortgage Advice Services! So, if You Are looking for a Remortgaging Guide with a ‘No Nonsense, ‘No Mumbo Jumbo‘ approach, then this is just the Remortgaging Guide You will have been looking for.
We just created a brand new ‘No Nonsense‘, ‘No Mumbo Jumbo‘ Guide to Remortgaging in the UK in 2019.
Here is how You too could be ‘Min Maxing‘ Your Mortgage by simply following a few steps from our brand new:
‘No Nonsense‘, ‘No Mumbo Jumbo‘ British Remortgaging Guide
First Decide if You’re in a Good Position to Remortgage
The answer to this will depend on your circumstances. Start by taking stock of where you are now.
Look at your existing mortgage statement. Check the small print and note down all this:
- Your current interest rate
- Your monthly repayment
- Your amount of loan outstanding
- Your deal deadline
- Your deal type: fix, discount or tracker
- Your repayment term, eg, 25 years
- Your early repayment penalties
Then Calculate your Loan-To-Value (LTV)
What proportion of your home’s value is still outstanding? This is important. You’ll not know which category of deals you can apply for without this knowledge.
For example, an £80,000 outstanding loan on a property valued at £100,000 is 80% LTV. The lower you can make your LTV, the better deal you’ll get offered.
Remember it’s the value of your home today that gets taken into account. Check comparable values on a website such as Zoopla.
You may find its value has increased so your LTV has gone down a band. This will open the doors to better deals for you.
Think hard about if it’s the Right Time for You to Remortgage Right Now
The most likely reasons will be one of these:
- You’re nearing the need of your current fixed or discount deal. So you know you’ll soon move to your lender’s more costly Standard Variable Rate (SVR).
- You want to reduce your monthly outgoings. You can do this by taking advantage of the current availability of low-interest deals. (Note, if you are not at the end of your current deal period, you may need to factor in an Early Repayment Charge (ERC). In most cases, the ERC is a percentage of the loan, usually between 3% and 5%. Now, with deals being so competitive, it could still be worth your while doing this).
- You would like to remortgage to free up equity. This could be for a specific purpose. It could be for a home improvement project, a cash sum for a holiday or property deposit for your children
Check Your Credit Score BEFORE You Apply for a Remortgage
A healthy credit score will be essential if you want to remortgage.
Did you take out your mortgage before 2014? Then you will find that the affordability criteria that lenders now have to apply by law are tighter. You’ll now need to show evidence of all your outgoings and income.
So now’s the time to make sure you’re not in overdraft with your bank. Pay off any outstanding debts. It’s a good idea to close any unused credit cards too.
Different lenders use different credit reference agencies. It’s worth doing your homework and checking for errors on your files. You should look at your details on all three of these main ones: Equifax, Experian and checkmyfile. Thanks to GDPR, you’ve now a statutory right to do this for free.
Have a Figure Ready to Give on Your ‘Disposable’ Income
Lenders have to know you can afford to pay back the new loan each month. So be ready to state how much ready money you have left in your account. This is after all your monthly repayments have gone out, including your mortgage.
The larger the amount of disposable income left over at the end of each month matters. The higher it is, the more comfortable the lender will be with your loan application. They’ll view you as a reliable customer.
Think through the Type of Remortgage You Need
You’ve a choice of remortgage types. If you’re in a steady situation, then a fixed mortgage may well suit you. These have gone down in price and are excellent value right now. It’s why five-year fixes have soared in popularity. You get security as you know rates won’t fluctuate in line with changing interest rates.
If you want more flexibility, a variable mortgage may be better. But it will probably cost you more once you are past the initial promotional period. Your monthly payments will fluctuate in line with changing interest rates. So they make budgeting more tricky.
Then Decide if You want to Use a Broker
Comparison websites can provide an overview of what’s available. But most experts agree that a qualified mortgage broker will get the best deal for you.
Mortgage brokers have in-depth knowledge of the industry. They will also know which lenders will accept you according to your circumstances. Some are less stringent in some areas of affordability; others are more so. They also take all the paperwork burdens off your hands.
Are you interested in learning more about remortgaging? To have an informal talk about your options, we’ll give you personalised, impartial advice on your remortgage if you would like to contact us here.