Homeowners remortgage for all sorts of reasons. It could be you’re coming up to the end of your current deal and want to see if you can get a better rate or reduce your term, or maybe you want to borrow extra cash for home improvements or to consolidate other debts. Whatever the reason, remortgaging is another of those financial decisions which has to be carefully considered and researched.
Some of the points to consider are fairly obvious and straightforward. These include checking for early repayment fees if you haven’t reached the end of your mortgage deal, comparing the market for interest rates and available schemes and calculating all the various fees and charges that will accompany a new mortgage application (hint: we can do all of this for you for free).
Another more surprising factor, however, is how you behave in the months leading up to your application. Many people fail to understand the importance of spending carefully and being cautious with expenses in the lead up to a remortgage.
Although you are already approved for credit on your current mortgage, this doesn’t mean your new mortgage application is already a done deal. Applying for refinance will spark new credit checks, so if you know you will be remortgaging in the near future then make sure you spend wisely in that time.
Taking out new credit applications, or ramping up your spending on existing credit cards suddenly and significantly, can impact your credit score and therefore affect the mortgage rates you can get access to. In a worst case scenario, your mortgage application may even be rejected.
To avoid this mistake it is advisable to have a few quiet months leading up to the time when you will be remortgaging. This means making all credit repayments on time, not taking out any new loans or finance, and avoid maxing out your credit cards.
For more help and advice on remortgaging, including searching the market for the best available deal, get in touch with one of our friendly local advisors today.