What to Do When a Remortgage Seems Out of Reach

There are many reasons that a homeowner may feel that a remortgage is out of reach for them.  That there are greater odds they would not be able to obtain lending approval for a remortgage than they would.  They take for granted that they will not be able to obtain the remortgage they want or need and so they don’t even attempt or apply for a remortgage deal with a lender or broker.  It is true that sometimes lending is out of reach, but often times it just is a situation that requires a special type of lender, remortgage expert such as a broker, or special consideration with the right lender to help a homeowner get the remortgage they want or need.

One reason a homeowner may feel a remortgage is out of reach is that they have little or no equity built up into a property.  They may even have negative equity levels in their property.  For those unfamiliar with what equity is, a quick and basic explanation is that equity is the ownership a homeowner has in their property.  An estimate of equity can be determined by taking the current market value of a property and subtracting the mortgage debt.  The total is then the equity or ownership value the homeowner has in the property.  This equity is used in different ways when trying to obtain a remortgage so it is an important aspect.  A broker or lender will want to determine how much equity there is in the property during the remortgage process.  Negative equity, mentioned earlier, is when the value of a property has dropped below the level of the debt on the property.  This can occur in an economic environment when house prices are falling due to a sluggish housing market and the house has had a short amount since its purchase.  If a homeowner is determined to be in negative equity they cannot remortgage.  The way to get out of negative equity conditions is to either increase the value of the property or pay down debt.  The debt will have to be paid down to a level that is below the value to get it back into a positive equity situation. 

For a homeowner with a small amount of equity in a property it will be possible to remortgage in most cases.  Lower equity levels do not offer as good of an interest rate as those seeking a remortgage with higher equity will be able to acquire.  Working with a good remortgage lender or broker will help a homeowner in obtaining a remortgage when there is little equity involved. 

Some people feel that they would not qualify for a remortgage because their job status has changed.  Changing a job or starting a personal business are reasons that some homeowners think that they would be disqualified from obtaining a remortgage, but this is not true.  In some cases it may require a more complicated process to get the remortgage but a new job or the beginning of an entrepreneurial venture does not automatically mean disapproval.  New business starters may find it will benefit them to work with a remortgage expert who is experienced in working with self-employed homeowners looking to remortgage.  If you fall into this category then make sure you are working with someone that has the experience to help you have greater odds at obtaining an approval.  Talk to your lender and also question a remortgage broker for advice as to how they would proceed to assist you in your remortgage needs and situation.

The most common reason a homeowner would feel that a remortgage is out of reach is that there is bad credit involved.  Bad credit almost always means that a loan is unavailable.  However bad credit does not have to be a quick denial situation when it comes to a remortgage.  Many lenders are willing to work with homeowners that have bad credit.  Of course there will likely be a higher interest rate than the best deal available from that lender and sometimes fees are involved.  However, if a lower interest rate is obtained that what is being paid currently the remortgage could not only be a way to make a budget stretch further but an opportunity to repair a bad credit rating.  Not all lenders are willing to work with a homeowner that has bad credit but do not let that discourage, for there are just as many that are and one of the best bets is to consider a remortgage broker.  Remortgage brokers are experts at dealing with complicated remortgages such as a bad credit remortgage.  They know which lenders are willing to work with bad credit remortgages and which of those consider specific reasons for bad credit as being acceptable for consideration for approval. 

Remortgages do not have to be out of reach for a homeowner that has small equity levels or bad credit.  Even if there are other reasons for thinking a remortgage is out of reach the best advice is to talk with a remortgage expert.  Especially if the current mortgage deal has ended and is on a lender’s variable rate which is a high risk situation for many homeowners with strict budgets.  If there are better interest rates available and a remortgage could help in keeping costs of borrowing down then asking for advice and considering a remortgage has no risk.  Nothing lost but much to gain is the situation.  So if you are a homeowner that wants or needs a remortgage and you feel that a remortgage is out of reach, consider talking with a remortgage expert today for more information.  Even if you find out you would not be a candidate for a remortgage currently you can find out what steps can be taken to assure that you will be in the future.