If your mortgage is coming to the end of its rate, then before you start looking around there are a couple of things that you should consider doing so that you are fully prepared. Re-mortgaging can require a little work on your part. However, done properly, it can help you to unlock some extra disposable income each month.
Here are some tips to help you prepare properly for a re-mortgage.
1.Start sooner rather than later
Whether you are considering staying with your current lender, or moving to another one, it is always a good idea to shop around for the best deal you can find for your circumstances. It is possible to secure a great deal up to six months in advance – which is great news if you are tied into your current deal with a big switching penalty. The only risk in doing this is of course that you could lose out on a better rate that might pop up in the interim.
Don’t panic if you can’t immediately find a better rate. There will be new rates popping up all the time, and by starting early you will have the best chance of finding something before your current rate runs out.
2.Check your credit score
If you want to convince a mortgage lender that you have what it takes to be a good customer and pay a mortgage back then you want to ensure that you have a healthy credit score. Any lender who wants to check that you have the necessary discipline to keep up the repayments on a mortgage will take a look at your credit report to see if you have a good history of repayments.
The type of things that will be listed on your credit report will include your credit cards, overdrafts, previous mortgages, and even mobile phone payments – these will be over a period of 6 years. Because you can now check your credit report for free, it is well worth doing.
3.Check how much you need
If you are re-mortgaging, then you can ask your current lender to work out the figures properly. Don’t just guess how much you will still have left on your mortgage at the end of your current rate. If you do end up changing lenders, the last thing that you want to do is use an estimated figure and end up borrowing a shortfall as this will really cost. So, take the time and do the legwork. Ensure that you have all the relevant details to hand.
4.Check how much you can borrow
Different lenders will calculate how much they will lend you using different calculations. So, when looking at rates you will also need to take this into consideration. Prepare a list of your income and outgoings as these are the figures they will use to do their calculations. Make sure you include everything and again, if you don’t know how much you pay for something then check so that the information you provide is accurate. These figures are especially important if you are self-employed.