Can we help if you’re struggling to remortgage?

If you are struggling to remortgage, it can be beneficial to work with a mortgage broker. Some people might find it difficult to remortgage but a mortgage broker can help you find the most relevant product for you and save you hundreds.

The main reason to review your mortgage is to make sure you are on the best deal. New mortgages normally begin with a fixed or discounted rate agreed for a number of years, otherwise referred to as the initial term. When this deal ends, your repayments might go up. Interest rates can go up and down which affect the cost of your mortgage and cheaper products can come onto the market.

Why you might be struggling to remortgage

The most common reason why you might be struggling to remortgage is that you are failing the stricter affordability checks brought in after you bought your property. When this happens, people may be stuck on higher interest mortgages or their lender’s standard variable rate despite being up-to-date with their mortgage payments and not trying to increase their borrowing.

New rules introduced by the Financial Conduct Authority (FCA) may mean it is easier for some people stuck on more expensive mortgages to switch. Some lenders will still not offer this so you might need to meet certain eligibility criteria to remortgage.

A low credit score could also result in you struggling to remortgage. If you don’t know your credit score, the first thing to do is check your credit rating and improve it by paying off debts.

Having a high loan-to-value could also prove a problem. The value of your property can go down, as well as up. This means when you come to switch your mortgage you could be assessed on a higher loan to value (LTV) which reduces your chances of remortgaging. A loan-to-value is the amount you borrowed compared with the value of the property. But if your home has gone down in value and there is still a large amount left on the mortgage, your LTV would be high. Being in negative equity will also cause problems when it comes to remortgaging. This is where the amount outstanding on your mortgage is more than the value of the property.

If your personal or household income has reduced since you took out your mortgage, you might struggle to remortgage. A drop in income could mean you fail the affordability assessment.

Another reason you might be struggling to remortgage is if you are currently in arrears on your mortgage or have missed any mortgage payments in the last 12 months.

If you are struggling to remortgage and would like some remortgaging advice, then please get in touch.

*Your home maybe repossessed if you do not keep up repayments on your mortgage.

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