When you first start looking at remortgage options, you might enter a few details such as the value of your home, how much you owe, and how much you’d like to remortgage for – but it’s important to have all the documents ready if you’re after a quick completion.
Today we’ll explain some of the details that our consultants will need to help you assess the best mortgage products for you and what a lender will need to know to make you an offer.
Remortgage Application Requirements – a Checklist
Let’s run through the exact information you should have to hand, so you’re prepared for the remortgage application process.
Details of Your Current Mortgage
Although you probably have a reasonable idea about what you owe on your mortgage, a remortgage lender will need to know the specifics:
- The exact balance at the time of application.
- What mortgage term you have on your current product.
- How much you’re repaying each month.
If you are trying to remortgage within a fixed term, you’ll need to check any early repayment charges and the current interest rate to ensure that the remortgage you choose is more affordable.
Most lenders ask for around a month’s notice to issue a redemption statement, so if you can build in extra time for your remortgage to complete, it can be advantageous.
Proof of Your Annual Income
Many remortgage applicants have been with the same lender for many years, so you might find that your average earnings have changed somewhat since you first applied.
It’s important to separate your basic salary from bonuses or overtime since lenders have different policies regarding supplementary income in your affordability assessment.
Self-employed remortgage applicants will also need to collate at least two years of accounts and tax returns and calculate the annual average.
Information About Monthly Expenditure
Along with your income, lenders need to check on your regular outgoings to be sure you can afford the monthly remortgage payments.
They’ll normally ask for a list of your commitments and obligations, including loan repayments, other debts such as credit cards, and pension contributions.
If you have other properties or mortgages, including buy-to-let properties, you’ll need to include that information in your income and expenditure report.
Evidence of Your Deposit Source
It’s possible to remortgage without any deposit since your equity in the property above the value you wish to borrow acts as the lender’s security.
However, there are strict rules to avoid money laundering, so lenders will need to check on your ID and evaluate your income source to ensure this is legitimate and above board.
For example, any gifted money or inheritances used to pay towards a property will need documentation to show where the capital originated.
If you have made any structural changes to the property since your original mortgage, the remortgage lender will need to see planning permission documents, buildings regulations certificates and sometimes completion documents.
This information feeds into the valuation and verifies that the home’s value is accurate.
Why Should I Check My Credit Score Before Applying for a Remortgage?
Credit checks are an integral part of any mortgage or remortgage, and the lender will be looking to see whether you have the financial ability and track record to make your mortgage repayments on time.
Most UK remortgage providers use Experian, Equifax or TransUnion to request applicant credit files.
Your credit report includes a fair bit of information, dating back six years:
- Credit accounts you have taken out – credit cards, overdrafts, mortgages, mobile phone contracts and loans, for example.
- Any issues, such as late payments, defaults, IVAs, DMPs or CCJs.
- An assigned score indicating how creditworthy the assessment bureau considers you.
Credit reports are free to download, and we’d recommend you check your file from each of the three major agencies before applying.
That means you can work on improving your score if you need to, address any errors, and close accounts that you’re not still using.
How Can I Make Sure I Get the Best Remortgage Deal?
Remortgages can be a great way to reduce your interest costs, cut down on your monthly mortgage payments, consolidate other unsecured debts, or raise cash for projects such as home improvements.
The key to getting an excellent rate is to know what your lender will ask, the criteria in place, and how to strengthen your application to mitigate risk.
For example, if you have any issues with your credit report, you can provide context in the initial application, showing how you have since repaired your finances, and be upfront so that the lender doesn’t stumble across anything during their assessments.
The other important element is to work with an experienced, independent broker who can work through your requirements, recommending lenders and products that best fit your needs.
Please contact Revolution Brokers on 0330 304 3040 or via email at email@example.com for further guidance in completing your remortgage successfully.