Qualifying for a Remortgage: How to Know if You Will Get the Deal you Want

Before you take the next step toward securing a remortgage it may help you to consider if you will qualify for one. There are some specific things that given some thought will help you to know if you are likely to gain approval or not when it comes to a remortgage. Review these items and then consider contacting a remortgage broker to discuss any questions you may have.

· Your credit rating is a topic of consideration by any lender that would offer you a remortgage. Bad credit can make things more difficult to remortgage but it doesn’t mean you can’t remortgage. You should be prepared to be denied the best remortgage deals if you do have bad credit. The best interest rate offers are reserved for borrowers with ideal credit ratings. If you do not get an offer that you want to accept then you can always work on correcting your credit rating. Paying down debt and improving your credit rating can help you obtain a better remortgage deal.

· Having adequate equity in your property will help you get better remortgage deal offers than those with little equity. Equity is the value of your home minus the debt on the home. A homeowner that wants to build up more equity in their home would either have to improve the value of the property or pay down more debt.

· Another way to look at equity you have in your home is to consider when you are applying for your remortgage a lender will offer specific loan to value or LTV offers. To determine the LTV you take the value of the remortgage amount you want to borrow divided by the value of your property. The higher the value of your property and the lower the amount you want to borrow the better the remortgage interest rate you will have available to you.

· Your household income level will be a part of the consideration that will determine if you can remortgage and what deals will be offered to you. The lender is most interested in whether you can afford to pay back the loan. A homeowner is usually able to borrow up to 5 times their income level.

· The amount of debt you have will counteract the amount that you will be able to borrow. Lenders want to know that you can pay back debt. If you have a large amount of debt then lenders understand that a large portion of your salary is going toward paying that debt instead of being available to pay back remortgage debt. By paying down debt levels a homeowner can strengthen the chance of getting approval and getting a good remortgage deal offer.

 

By understanding the above topics you will have a better idea of what lenders will be considering when they review your remortgage application. No lender expects a perfect credit rating, low LTV, and no debt. Even bad credit will not keep a homeowner from obtaining a remortgage.