5 FAQs About Remortgaging
Once you’ve developed an understanding of what a mortgage is and how to get one in order to buy the property you’re interested in, it can be useful to do some research into the process of remortgaging once you’re safely ensconced in your new home.
Why? Because it’s highly likely that you’ll need to do this at some point in the future, so preparing yourself and knowing what to expect can help make everything significantly less stressful when the time comes.
To help you get started, here are some of the more frequently asked questions we hear about remortgaging. And, of course, if you need any further help or advice, get in touch with the BR Needham team today.
1. What is remortgaging?
Quite simply, remortgaging is where you move the mortgage on your home over to a new deal, either with the lender you’re currently with or to a different one.
2. When should I remortgage?
Typically, remortgaging happens when the end of the term you’re on is coming to an end. It’s recommended to start the process three months or so before the end date so you can make sure you get good rates. However, you can remortgage at any time – although you may be hit with an early repayment charge if you do.
Other reasons to consider remortgaging, aside from your current term coming to an end, include potentially being able to save money on a new deal, wanting to move from a standard variable to a fixed rate deal, or if you’re looking into releasing some equity for home improvements.
3. Can I remortgage with bad credit?
It is possible that you’ll be able to remortgage if you have a low credit score, but it can be more difficult and you may have to work with a specialist lender and you may find that your options are relatively limited.
4. How long does it take to remortgage?
Each individual case is different so there’s no hard and fast answer to how long the remortgage process can take, but it’s generally advisable to remortgage around three months before the end of your current deal so as to ensure that you have sufficient time to research the market and apply.
5. Why would a remortgage be declined?
Remortgages can be denied by lenders, typically because of low or poor credit ratings, or because of significant mortgage arrears and missed payments.
If you have a high loan-to-value ratio between your current outstanding mortgage balance and the value of your house, or if you fail to pass affordability checks because of a drop in income, you may also be refused.
Once you’ve been denied a remortgage, it’s advisable not to make further applications with other lenders, as this could have an impact on your credit rating. Instead, get in touch with the BR Needham team to discuss your options.