Mortgages made easier
Many people can remortgage without much fuss. But others might have more unique or unusual circumstances that can make the whole thing seem a little trickier. Here, we explain everything you need to know.
If you’re a UK citizen in steady employment, with a bulletproof credit score and no plans to switch jobs any time soon, your remortgaging application should be a breeze. But if you fall outside this description, you might find the process slightly tougher.
In this article, we’ll explore how easy remortgaging is generally, and dive into 5 situations where a lender’s decision to grant you a new and improved mortgage deal might come down to your particular circumstances.
Generally speaking, remortgaging is pretty straightforward. As we explain here, it usually takes around six weeks to switch to a new mortgage deal.
From speaking to a mortgage broker, gathering your paperwork, and submitting your application to having your property valued, receiving your offer, and switching over to the new deal, it’s easier than you might think. Here’s how it works, if you’re craving a bit more detail!
That said, there are some situations where remortgaging can be a bit more complex or time-consuming. These include:
Lenders are, by their nature, risk-averse. For them, anything outside “the norm” might mean needing to jump through a few more hoops to prove you’re able to repay what they lend you.
Generally speaking, getting a new mortgage deal with a brand new lender will mean more hoops than sticking with your current lender and getting a different deal with them (called a “product transfer”) – but definitely don’t let that put you off searching the market to see what your options are.
Now, important to know: it doesn’t at all mean you won’t be able to remortgage if you fall under one or more of the categories above — but it can be a bit more complicated (which is why we always recommend using a broker like Habito to help!). The upshot is that most lenders are happy to review things on a case-by-case basis. So, let’s do the same...
It’s not always easy, but it’s not impossible, either. Being your own boss and trying to remortgage simply means you need to be thorough when proving your income.
Most lenders will want to see at least a year’s worth of audited accounts, while others will ask for three years. If you don’t have enough years of accounts yet, you might be asked to prove your workflow instead, in the form of upcoming contracts.
And, of course, the cherry on top here is having a good credit score. This will show lenders that not only are you making your own money, but you can responsibly manage any money you’ve borrowed. In other words, you’re the full package.
If you’re about to start a job with a new company, or you’ve just recently changed jobs, you may find it difficult to find a lender who will qualify you for a new mortgage. This can be especially tough to swallow if your new job comes with a salary increase.
So, why can this situation make lenders antsy?
As we mentioned, they don’t like risk, and they see changing jobs as risky business. Most new roles come with a probationary period, and they’d rather lend you the money once they know you’re out of the woods, professionally speaking.
Likewise, if you’re currently on – or about to go on – maternity or parental leave, lenders will want some assurance that you’ll be returning to work.
It’s good to be prepared for the possibility that they’ll write to your employer to confirm your return to work date and salary. Some may even ask you about future childcare costs to make sure you can afford the repayments on top of that new expense. If they’re happy with what they hear, being on maternity or parental leave shouldn’t mean they won’t accept your application.
Whatever your current employment status, it’s always worth remembering that the criteria for remortgaging will differ from one lender to another.
So, for example, if you’re a contractor working on a 12-month fixed-term agreement, that might give some lenders pause. Thankfully, others will simply ask for assurances, like proof that the contract has been renewed at least once in the past, or evidence of a track record in your industry.
Similarly, if you’re working on a zero-hours contract, a good track record with your employer (i.e., lots of hours worked, evidenced by payslips) and a solid credit score can go a long way with some lenders.
Again, it’s not always easy to remortgage with these situations in the background, but if you give yourself enough time to shop around, you’ll be much more likely to find a lender with terms that work for you.
There are no two ways about it: trying to remortgage while a bad credit history pulls you down can be frustrating. Despite ticking many of the right boxes, a poor credit score can often take some of the best deals tantalisingly out of reach.
The good news, however, is that it’s not impossible to remortgage with bad credit. A missed mobile phone bill from three years ago probably won’t stop you from getting a good deal. On the flip side, something more serious, like a County Court Judgement (CCJ) will limit your choice of lenders quite a bit.
The best thing to do is to check your status with the usual agencies before applying. Most lenders use one or all of Experian, Equifax, and TransUnion, so this will give you a good idea of what you need to do to improve your credit score.
Just the fact that you already have a mortgage in the UK as a foreign national is a pretty good sign that you’ll be able to remortgage when the time comes.
If you’re sticking with your current lender on a new deal (called a “product transfer”) there’s very little you’ll need to do as they’ll have all the necessary information.
But if you’re switching lenders, be prepared to jump through a few of the same hoops as before. For instance, they’ll want proof that you’re allowed to live and work in the UK, that you have a good credit history in the country, that you’re permanently employed, and that you’ve got an active UK bank account.
You might think your circumstances are unusual, but don’t let them stop you from finding a better, money-saving mortgage deal. If you plan ahead, shop around, and get the right advice, there’s a good chance you’ll be able to remortgage your home – just like anyone else.
Want to see if remortgaging could save you money? Try our handy remortgage calculator to see how much you could save.
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