If you are coming to the end of a fixed term mortgage, you shouldn’t just go with your existing mortgage provider when your current mortgage ends. Mortgage lenders should take into consideration the current value of your property before an offer is rolled out.
You may be looking to remortgage to get a better variable rate mortgage or need some additional borrowing. You could remortgage if you need some additional borrowing for home improvements like an extension or a loft conversion.
Savvy home owners check the market to see what mortgages are out there and how much their property is worth at the time of re-mortgaging.
Before you do anything else, you MUST get a copy of your credit report.
- Once you have the report, check whether there are any errors about any of your borrowing. You may have previously had a loan and paid it off and it does not show on the report. If this is the case, you MUST write to the credit company to let them know the change of circumstances.
- This report will also contain a list everyone in your current home who may have taken out any borrowing including loans and credit cards. If they have defaulted on payments or have heavy borrowing, this WILL effect your chances of getting a re-mortgage.
- Once you get the report, you may need to write back to the credit report company to financially disassociate yourself from each family member. For guidance on this click here.
Do your homework first and get your paperwork in order by following this guide:
1. See how much your current property is worth (by following this you may end up with a lower monthly mortgage payment):
- Check Zoopla to see how much your property is worth by signing up for a free estimate.
- If you have carried out any home improvements, make sure you update this information to reflect the current condition of your home on the website. You may find the estimate of your house value goes up which means your loan to value will be lower (you could then be offered a lower interest rate which could mean a lower monthly mortgage payment).
- Print out a copy of the estimate.
2. Get an estate agent to value your property (optional):
If you prefer to get a more realistic value of your home if you were to sell it in the current market, get a price for your property from at least three estate agents.
3. Get your documentation in order.
You will need the following documents to hand:
- Copy of photographic ID (driving licence or passport)
- Current P60 (if employed)
- Last two years SA302 (if self employed) from Inland Revenue
- Copy of your tax declaration (if self employed) from Inland Revenue
- Last three months pay slips
- Last three months bank statements
- Monthly expenditure form
4. Contact your current mortgage provider:
- Give them your current estimate from Zoopla or estate agents valuations. Ask whether they can give you a better deal on your current mortgage.
- Once you have this information, you can then search the market yourself to see if you can find a better deal.
5. OR Contact a mortgage advisor
- Give your mortgage advisor the current estimate of your property from Zoola or estate agents valuations. Ask them to find you a better deal on your current mortgage.
- Once they have found a deal, check online yourself to see if you can better it (optional).
6. When you or your mortgage advisor find a deal:
- If any problems arise with your credit score, apply for a credit report and make amendments to it if necessary.
- You will need to fill in an application form.
- Send the lender or your mortgage advisor copies of your documents.
- Send the lender or your mortgage advisor the monthly expenditure form.
- You will be credit checked.
- Your mortgage advisor may at this stage give you a mortgage declaration to sign in readiness for the remortgage.
7. You should be given an agreement in principle.
- The lender will now fully check all your paperwork and may come back to you to ask for more information.
- The lender may send a surveying company to your home to check your properties worth.
7. At this stage you may need a solicitor.
- This will depend on why you are borrowing:
- If you are remortgaging for a further advance with your current lender, you will not need one.
- If you are remortgaging to get a better deal with your current lender, you will not need one.
- If you have found a deal elsewhere, you will need one, however the lender may offer a free legal product to you so do check with the lender first.
8. Once the mortgage has been agreed and the valuation has been confirmed.
- You will be given a mortgage declaration to sign and send back to the lender or mortgage advisor.
- If your remortgage is for further borrowing (“Further advance offer”), you will be sent a form to sign and send back to the lender.
- Your solicitor will arrange for the transfer of funds once the remortgage is complete.
You should now look to reviewing your mortgage life insurance to take into consideration the change in cover you may now require.
If you are remortgaging to buy something for your property, you should now look to reviewing your buildings and contents insurance to take into consideration the change in cover you may now require.