When taking out a new mortgage, lenders typically start borrowers on a discounted or fixed-rate deal for a predetermined period of time. This is often referred to as the initial term. When this initial period ends, the repayments tend to increase. Reviewing your mortgage deal at regular intervals can help you ensure you are getting the very best deal; however, remortgaging is not always a straightforward process.
Why might you be unable to remortgage?
There are a number of reasons you may be refused a remortgage deal, but there are steps you can take to ensure you are in the best possible position when submitting your application.
Leasehold issues
Owners of leasehold properties can sometimes run into problems with remortgaging if the lease term has fallen below a certain number of years. It is important for leasehold property owners to factor the lease extension cost into their financial plans and obtain more information on lease extension costs from trusted sources.
It is important to shop around for lease extension cost deals, as there are conveyancers that can help you save hundreds of pounds on legal and valuation costs.
Affordability checks
The most common reason borrowers are not able to remortgage is failing affordability checks carried out by lenders. The affordability parameters change frequently, which can leave some borrowers as ‘mortgage prisoners’ because they are unable to lower their interest rates. The good news is that the Financial Conduct Authority has introduced new rules that may make it easier for some borrowers to remortgage and secure a lower interest rate.
It is also important to take steps to boost your credit score as much as possible, as this can play a significant role when trying to secure a remortgage deal.
