If you’ve got a good, secure job alongside an excellent credit score, then remortgaging will be a straightforward process for you. However, if your financial and personal situation veer slightly from this standard, then things can be a bit more complex.
In this guide, we’ll look at how easy remortgaging is in the right circumstances, as well as the particular factors which influence a lender’s decision to offer you a better mortgage deal.
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How Easy Is It to Remortgage?
Remortgaging is generally pretty easy, certainly a lot easier than getting your initial mortgage. From comparing deals and gathering documents to submitting your application and finalising the switch, the entire process only takes about four to eight weeks.
Having said that, lenders do tend to be quite cautious. Meaning, that if your profile falls outside their set criteria then you’ll face some extra checks in order to prove your ability to repay. Importantly, this doesn’t go to say that remortgaging is off the table, just that it might take a little longer and involve a few more steps.
How Can I Make Remortgaging Easy?
The best way to make your remortgage quick and easy is by getting what’s called a product transfer, i.e., by staying with your current lender. This is because your lender already has all of your details and history, therefore far fewer checks are necessary. For this reason, a product transfer can be completed in just a day. Although, there is a trade-off, and this is that you won’t be able to to compare potentially better offers from other lenders.
Of course, a consistent income and employment record both similarly smoothen the process since they reassure lenders you’ll comfortably meet repayments. Not to mention, a strong credit score likewise works to show your financial reliability. And finally, having a stable property value and a healthy amount of equity in your home will also help you out when applying for a new deal.
Things That Make Remortgaging Harder
Let’s now move onto the factors which imply that remortgaging won’t be as easy for you as it can be for others.
A Recent Change to Your Employment
One of the main things leading to you finding it harder to get approval for a remortgage is if you’ve just started a new job or are about to move to another. Strangely enough, this is even in spite of whether your new role comes with a higher salary.
Reason being, lenders view job changes as a risk due to the fact that they can involve a probationary period. Whereas, what they prefer to see before offering different terms is proof that your income is secure. Relatedly, if you’ll be going on maternity or paternity leave soon, your lender will want to know when you plan to return to work and what your post-leave income will be.
If You’re Self-Employed or a Contractor
Remortgaging is a bit trickier if you’re self-employed or you work on a zero-hour contract basis, given that your income is less predictable than that of someone on a salary. Again, this doesn’t mean it’s impossible, just that it just requires a bit more preparation when it comes to proving your earnings.
Specifically, lenders will ask to see between one and three years of business accounts or tax returns to assess you. If you’re relatively new to self-employment and consequently don’t yet have that much of a history, you’ll need to provide evidence of future work, such as signed contracts or ongoing renewal agreements, and the same goes for contractors. As such, having a solid track record in an industry with a lot of demand will give lenders more confidence.
If You’ve Got Bad Credit
It’s no secret that remortgaging with bad credit can make things more difficult, just as if you were getting a mortgage in the first place. Regardless of whether you meet most of a lender’s other criteria, a low credit score exempts you from the most competitive deals. But, even having bad credit doesn’t make remortgaging completely out of the question.
For instance, a single missed payment from a few years ago is unlikely to cause major problems. More serious issues, on the other hand, such as payday loans, bankruptcy, or a County Court Judgment, can significantly narrow your pool of potential lenders.
Before you apply, it’s worth giving your credit report a good looking over. This will help you find out where you stand while highlighting any areas you can improve. And remember, there are specialist lenders who work specifically with borrowers who have bad credit, so there are still options available, whatever your circumstances.
Get Expert Remortgaging Advice
Even if your situation feels a little out of the ordinary or you’re a mortgage prisoner, it shouldn’t stop you from finding a deal which saves you money, especially considering the cost of remortgage fees. With some forward planning paired with expert guidance, remortgaging your home can be just as easy as it is for anyone else.
Our online platform makes it simple to compare remortgage deals from lenders across the UK, giving you up-to-date information on the most competitive rates available. Once you’ve found a deal that suits your needs, our dedicated specialists are on hand to offer tailored advice. We take the time to understand your background and long-term goals, ensuring you get a solution which works for you.
If you’d like some help or reassurance along the way then be sure to reach out, we’re here to make the process clear, straightforward, and stress-free so that you’re directed towards a remortgage which supports your financial future.
Yes, lenders can decline a remortgage application if you’ve got a poor credit score, a high amount of debt, or an insufficient income. Other issues, like a drop in your property’s value, a low loan-to-value ratio, or recent changes to your employment status, also make approval more difficult.
In the run-up to remortgaging, you should try to avoid applying for additional credit cards or loans, making large purchases on unessentials, and dipping into your overdraft. Conversely, Keeping your spending sensible and your accounts in good order will present you as a reliable borrower.
About the Author:
Matthew Stevens
Matt is a top contributor at Speedy Remortgage and has worked in the financial services industry for over a decade now. Through his expertise on mortgage and remortgage has helped hundreds of customers to achieve their property goals.