Are you worried that you might not be able to remortgage?
So, you want to remortgage but your situation is not straight forward. You are concerned that your existing fixed or tracker rate is coming to an end and want to know if you will be able to remortgage.
With hundreds of mortgage lenders and thousands of mortgages available there is often a solution to your remortgage needs. Most complicated situations can be overcome and there is a good chance you will be able to remortgage.
Below we have answered some of the most commonly asked questions about remortgaging which will hopefully put your mind at rest.
Table of Contents
Can I remortgage if my house has no mortgage on it?
The straight answer is yes you can or YesCanDo. A property with no mortgage on it is known as an unencumbered property. You will be treated no differently to someone who already has a mortgage and you will have a wide range of mortgages to choose from. Speak to an independent mortgage broker who will search the whole market for all of your options to get you the best rates and deals.
Can I remortgage if I’m self-employed?
Although most lenders will want more information from you, there is absolutely no reason why a remortgage shouldn’t still be straightforward. Most lenders will want your accounts from the last three years however there are a few lenders that only require accounts from the last two. Make contact with a local mortgage broker as they will know which lender will be best for your situation.
Can I remortgage with the same lender?
Yes, you can. However, it might not be your best option. Although your existing lender will offer you a good range of rates and deals, they may not be the best option for you. Remortgaging away from your existing bank or building society will give you far more choice and quite often you will be able to get considerably lower rates which could save you a lot of money. On a side note, if you have a mortgage with BM Solutions, you will have to use a mortgage broker.
Can I remortgage during my existing fixed term?
Yes, you should be able to remortgage during your existing term however it is almost definitely not in your interests to do so. Your existing fixed rate will more than likely have an early redemption fee. This means that your existing lender will fine you for leaving them during a fixed rate period. You can find out how much this is by looking at your mortgage offer. If you need help with this a mortgage broker can assist as they have experience of reading mortgage offers and will be able to confirm if this applies to you.
Can I remortgage if I have an interest-only mortgage?
It may be possible, but you will find that most lenders no longer offer mortgages on an interest-only basis. You will need to repay the mortgage at the end of the term so now might be a good time to reassess the possibility of changing to a repayment mortgage. Speak to a no-fee mortgage broker who will be able to advise on the options open to you.
Can I remortgage using my overtime, commission or bonus?
Most lenders will take overtime, commission and bonuses into consideration. Each bank and building society will look at these differently. The more constant and stable the commission is, the more likely it can be taken into consideration. Nearly all lenders will want to look at the last 3 months commission at the very least, with some wanting to see the last 6 or even 12 months’ payslips.
All lenders will want to see your payslips so make sure you have the last 6 months available; six if you are paid monthly and twenty-six if you are paid weekly. When commission and overtime is an essential part of your income for your remortgage, last year’s P60 can be very useful as it can show evidence from the past tax year of how constant these have been above your normal salary. No lender will allow for any missing payslips so get hunting in your work drawers or lockers!
Can I remortgage if I have a second charge loan on my property?
This should not be a problem however; it will reduce the number of lenders by approximately 50%. All lenders will take the second charge as a monthly cost along with any other credit cards or loans and will make a decision based on affordability. It will be worth getting advice from a mortgage broker if it is beneficial to you to pay the secured loan off by adding it to the mortgage. The adviser will need to consider the amount owed, the term left on the secured loan, the mortgage term and the interest rate on the mortgage.
How many years do I need to have left on my lease to remortgage my flat?
Once again this will vary from lender to lender however most bank and building societies will consider giving you a mortgage with 70 years or more left on the lease. However even if your lease has between 70-100 years left it is seriously worth getting your lease extended by contacting the freeholder because as the term reduces you will eventually have a problem remortgaging. You may also find it hard to sell the property in the future with a lease less than 70 years.
Can I remortgage a property I have recently purchased?
Most lenders will want you to have owned the house for at least 6 months, but the good news is there are a few lenders who will be happy for you to remortgage from day one.
Can I remortgage before my current deal ends?
Yes you can! Or at least you can get the ball rolling. Your existing mortgage will have an early redemption tie-in period and it is important not to finish the mortgage before this date. However, you can get a remortgage underway 6 months before this date. Although you will not be able to benefit from the remortgage straight away it will allow you to plan ahead. An example of this would be if you were remortgaging to carry out home improvements. You could get the remortgage underway and agreed with a mortgage offer. You may have to wait a while however it would mean you could book a builder in to carry out the works once your existing tie-in finishes and your new mortgage starts.
Can I remortgage to raise capital to buy someone else out of the property?
This is possible for sure and happens all the time however there a few things to understand. All lenders calculate whether they will lend to you based on if they think you can afford the mortgage. If you originally bought the house with someone else the lender will more than likely have taken both of your income into consideration. The first thing to do is call your existing lender and see if this is possible. If they say it is not, talk to a mortgage broker who will soon be able to find out if any other lenders will be able to remortgage.
Can I remortgage to consolidate or pay off debt?
Yes, it may be possible. If you are consolidating debt most banks and building societies restrict the amount you can borrow based on the value of your property. It’s important to understand that by consolidating debt you would turn an unsecured debt into a secured debt. if you are spreading the cost over a longer period, even on a lower rate it may ultimately cost you more in interest. All of this must be considered as this may not be the best course of action. Speak to a mortgage adviser who can talk you through your options.
Can I remortgage if I am on a probation period?
You will more than likely be able to remortgage. A few lenders will want you to have completed your probationary period however there are many lenders that will still consider this. It will help if you have had continuous employment history. Talk to a mortgage broker or adviser who will be able to help and give you advice.
Can I remortgage if I am on maternity leave?
Yes you can, however bank and building societies policy on this varies greatly. Some lenders will write to your employer to make sure you are returning to work. If you are reducing your hours on return this may also be taken into consideration. Most lenders will want to know your future child costs. Don’t stress about this as it’s not as complicated as it sounds and a mortgage broker will be able to give you advice and guidance.
When is the perfect time to start my remortgage?
The perfect time to start thinking about remortgaging is 6 months before your existing mortgage deal comes to an end. To find the date you will need to find your existing mortgage offer and it will show the date your fixed rate or tracker rate comes to an end.
I am paying the Standard Variable Rate on my mortgage
When you initially take out a mortgage, you are likely to be offered a low rate as an incentive to take out a mortgage with that bank or building society. These incentive rates are over 2 or 5 years. So, what happens at the end of the low rate? If you are not careful it will revert to the lenders standard variable rate which can be very costly to you.
There are not many situations in which it makes financial sense for you to be paying the standard variable rate on your mortgage. The standard variable rate is often far more expensive than any other mortgage interest rate your lender is offering. The good news is it is quite simple and quick to change to a lower rate and to save a considerable amount of money.
YesCanDo Money are a whole of market No Fee mortgage broker base near Emsworth not far from Chichester, West Sussex. If you would like further information or advice call 023 9237 3235 or fill in our online form and see if we can help.