A question we are commonly asked is: ‘How soon can you remortgage?’. Don’t assume you need to wait until your current deal ends before you can start the ball rolling. As a general rule, you can start the process of remortgaging up to six months before your existing deal ends.
If you don’t find a better deal at the end of your current term, you may revert to your lender’s standard variable rate (SVR). This could be considerably higher and greatly increase your monthly payment.
Recent research* has revealed that a worryingly one in four mortgage holders are sitting on their lender’s standard variable rate. To avoid falling into this category, you should dedicate some time to finding a better deal that will reduce your repayments and ultimately save you money.
8 top tips for getting ready to remortgage
- Start the remortgage process early
Many mortgage offers are valid for between three and six months from the date they are issued. This means your lender may be able to arrange for the new deal to begin when your current deals ends. A broker will be familiar with how long various lenders’ offer periods are and is ideally placed to find the right deal for your individual circumstances.
- Check your credit score
Lenders use your credit report to get information on how reliable you’ve been at paying back debts in the past. Different factors will affect your creditworthiness and companies such as Experian, Equifax or Callcredit all provide the type of credit checks you need to apply for a mortgage.
Using a credit card responsibly, not missing payments and cancelling unused accounts are just some of the ways to improve your credit score and get the mortgage deal of your choice.
- Ensure your details on the electoral register are up to date
Lenders use information on the electoral register to run identity checks, ensuring you are who you say you are, and that you live where you say you live. It is therefore vital that your details on the register are up to date.
- Stay out of your overdraft
Avoid dipping into your overdraft if you can avoid it, particularly in the months prior to your application, otherwise some lenders may consider you to be too close to the edge of your finances. If being overdrawn is unavoidable, you could always consider getting a cheaper overdraft with another bank, but aim to clear the debt as soon as possible.
- Avoid spending large amounts of money
Lenders may ask for your last three months’ bank statements before applying for a mortgage. This is so they can check that your income matches your payslips and that you could still afford your mortgage if rates were to increase. Tightening your belt before you apply also means you’ll be in a better position to afford moving costs, which can quickly ramp up.
- Don’t apply for new credit
It is recommended you wait six months between seeking credit and applying for a mortgage. Anything less than that, and below three months in particular, could hinder your credit score and lead to rejection.
- Get your paperwork ready
Lenders need to see a significant volume of paperwork throughout the application process. Your last three months’ bank statements and payslips, proof of address, your last three years’ accounts and ID documents are just some of the evidence they might ask for. Give yourself plenty of time to gather the required documents so everything is ready in advance.
- Pay your bills on time
From your phone bills to general household utility bills, always make your payments on time. Any late bills may count against you for a year and risk staying on your file for the next six years. Set up direct debits for your regular outgoings so that you never miss another payment.
Think you’re ready to remortgage?
Speak to one of our friendly experts who will guide you through the remortgaging process and find the right deal for your circumstances. With access to 12,000 products from over 90 trusted lenders, we are ideally placed to find opportunities to save you money. Get in touch today.