Remortgage How to get the best one?

The best Remortgage?  Contact Zing!

Before we talk about how to get the best remortgage for your needs, let’s ask ourselves a couple of questions. Then we’ll know we’re talking the same language.

What is a Remortgage?

Yes, as a mortgage expert, I DO know the answer to this, you’ll be relieved to hear! But, as in any business sector, we use words and phrases without considering that our clients may not have more than a vague idea what we’re talking about. To remortgage means to take out a new mortgage on a house or flat you already own.

This could be to replace your existing mortgage or be used as a means to borrow money against your property.

Why would you want to Remortgage?

You might be considering a remortgage because, currently, the deal you have is costing you way above the odds and isn’t in your best interests. Perhaps your current mortgage deal is about to end—many of the special offers have only a two to five year life-span. Maybe you simply want a better rate? Maybe you want to switch from interest-only to repayment.

It could be that the value of your property has shot up so you’re eligible for much lower rates. Some people want to pay extra each month because they’ve come into some money or had a payrise, but their lenders won’t let them. Finally, you may want to borrow more money and your present lender isn’t keen. Whatever the case, you need to find the best remortgage to raise money cheaply on low rates. I’m here to tell you that finding the best remortgage package could save you hundreds each month.

Remortgage- looking for the best

Is it always wise to remortgage?  Simple question. Simple answer. No. Not even with the best remortgage we can find you. We’ll advise you based on your specific circumstances, of course, but here are a few of the reasons why remortgaging isn’t always the most wonderful idea for you.

  • If your mortgage is small anyway, the additional fees you’ll pay for a new mortgage won’t be worth it
  • You may have to pay a huge charge for early repayment
  • The current rate you have is already brilliant
  • Your circumstances have changed through redundancy or illness, for example, and your income and/or credit-worthiness is compromised
  • Your home has lost value

How to find the best remortgage Well, come to Zing (but we would say that, wouldn’t we?) Seriously, though, this whole remortgage scenario is really quite complex. There are so many variables to consider and twists and turns in the market to negotiate. Interest rates go up and down like a yo-yo.

Lenders are more picky since the credit crunch, with the Financial Conduct Authority breathing down their necks. You must balance additional fees against any saving you might make. The most important thing is to do your research and do your sums—but what if you don’t even know which sums you’re meant to be doing?

Self-employed, How much can I Borrow?

This is the first question for most people looking to purchase. When you’re self-employed this isn’t such a straightforward one to answer.

First question is – How long have you been self-employed?

A handful of lenders will work on one year’s accounts but, a handful is probably being over generous. Most will want two if not three full years accounts before they will consider your mortgage application.

Second question – How much do you earn?

This really does provoke a range of answers, most of which are incorrect or illegal. The old favorite stock answer is “whatever I need to earn, my accountant will put down whatever my income needs to be”.self-employed

Another is, “I pay myself £1000 a week so I’m on £52000 a year”. A realistic answer is “I haven’t got a clue but I know my accountant does a good job & I don’t pay a lot of tax”.

I’m afraid that the lenders have got wise and closed the loop-holes around the self-employed, sorry there is now no such thing as “self-cert” anymore.

Lenders now require legitimate proof of income by way of the tax returns your accountant has submitted to HMRC.

To find out what your income really is &, what’s more important – what the lender will accept, you need to call HMRC on 0300 200 3310 and ask them to send you your latest three years SA302’s.

 

self employed female

You will need to have your NI number as one of the qualifying answers.

Once you receive your SA302’s you can clearly see what your declared income is and will be aware if you are able to move forward with your mortgage application. The figure usually used is “Total Income Received” & best case scenario is that you will get up to 5 times this amount but 4.5 times is more realistic.

Some lenders will use the latest year’s figures if they are increasing, some will take an average of the latest two years, some, especially if there is a drop in profit will want to use an average of the latest three years.

You then need to deduct various commitments, make allowances for the number of dependent children, term of mortgage etc but at least you now know what you earn. With this information, a mortgage adviser will be able to use the lender’s affordability calculators to find out who will lend you the most & what rate it will be issued at.

Call Zing Mortgages now to find out how much you can borrow but, save us all some time & order those SA302’s first.

Believe me, until you have these figures its all pretty much guesswork, which is good for no-one.