Is It Easy To Remortgage?
, by Matt Stevens
If you’re in stable employment and have a strong credit history, the process of remortgaging is pretty easy. But if your financial or individual circumstances differ from the typical profile, getting a new deal is a little more complicated.
In this piece, we’ll cover how easy remortgaging is when the conditions line up, as well as the aspects which lenders look at when deciding whether to offer you a more favourable mortgage rate.
Is Remortgaging Easy?
For the majority of people, remortgaging is quite a straightforward process, especially when compared to applying for your first mortgage. From researching new deals and gathering the paperwork to submitting your application and completing the transfer, it generally takes around four to eight weeks as opposed to the fifteen to twenty weeks it takes to buy a house.
Despite this, lenders do still take a cautious approach towards remortgages. So, just like when you were getting your initial mortgage, if your circumstances fall outside their criteria such as if you have a less than perfect credit record for instance, they’ll carry out additional checks to confirm your ability to repay.
That being said, this doesn’t imply that remortgaging won’t be possible for you, it’ll just involve a few extra steps and take a little longer.
Circumstances When Remortgaging is Harder
There are some particular situations where remortgaging will be harder for you than it is for others.
1. You’ve Got a Poor Credit Score
Adverse credit makes remortgaging more challenging, as lenders reserve their best rates for those with stronger credit profiles. Though, again, having a low credit score doesn’t go so far as to rule out the possibility of remortgaging altogether.
Minor issues, such as a single missed payment from several years ago won't cause major concern. However, more serious credit problems, like payday loans, bankruptcy, or CCJs, will inevitably limit the range of lenders willing to consider you.
Before applying in such scenarios, it’s best to carry out a free credit check (free for 7 days, then £14.99 a month - cancel online any time) to understand your credit report and identify areas for improvement so that you’re in a better position when you come to apply. Either way, don’t be discouraged, since there are specialist lenders who specifically help borrowers with bad credit get new deals.
2. You’re Self-Employed
If you’re self-employed, the process is a little more involved because your income is less consistent than that of someone in salaried employment. The same applies to those working on zero-hour contracts, where earnings vary month to month.
To assess your application, lenders will ask for one to three years’ worth of accounts. If you’ve only recently gone self-employed and so don’t yet have a long financial history, you’ll need to demonstrate future income instead through signed contracts, renewal agreements, or proof of ongoing work.
Having a proven track record in a high-demand industry will likewise reassure lenders that your income is sustainable enough.
3. You’ve Recently Changed Jobs
If you’ve only just started a new job, or are about to move into one, you’ll find lenders more hesitant to approve you, even if your new position offers a higher salary. This is largely down to how job changes come with a probation period, which lenders see as a potential risk.
What they really want to see is a reliable income before agreeing new terms. Similarly, if you’re due to take paternity or maternity leave, your lender will ask when you plan to return to work and what your income will look like once you do for this same reason.
What is the Easiest Way to Remortgage?
The easiest way to remortgage is through what’s known as a product transfer, which is where you switch to a new deal with your existing lender. Because your lender already holds your account history and personal details, less checks are needed, meaning that the process is sometimes completed in as little as a day.
The main drawback, although, is that staying put means you could miss out on more competitive offers available elsewhere. It’s basically a trade-off between convenience and the potential for bigger savings.
Additionally, as we’ve mentioned, a good income and steady employment alongside an excellent credit score will all make the process easier by showing lenders that you’re able to keep up with repayments. Not to mention, having a nice amount of equity in your home and a consistent property value will further work in your favour when remortgaging.
Make Remortgaging Easy by Speaking to a Broker
Even if your circumstances are unconventional, that doesn’t mean you can’t find a deal which saves you money. With a bit of planning and some expert advice, the process can be every bit as simple as it is for anyone else.
At The Mortgage Genie, our experienced brokers specialise in remortgaging and have extensive knowledge of the market which allows us to help homeowners find the best possible deals, including those with more complex situations.
If you’re interested, then be sure to get in touch with us at 01915809890. And why not get a quote today by using our remortgage calculator?
The above blog has information contained within which was correct at the time of publication but is subject to change.
