High Street lenders and building societies in the UK have a portfolio of mortgage products for refinancing services. There are many factors that the lenders consider when assessing a mortgage application for a remortgage. A mortgage adviser who specialized in remortgaging would help you to analyze your circumstances to find a suitable new lender. It is important to review personal income, existing credit commitments, current mortgage details, and other related factors to find a suitable option.
Mortgage advisers have online customer fact-finds which help applicants to log in and complete. It will provide all the required information to the mortgage adviser to recommend a suitable mortgage option. Further, they would schedule a call appointment to discuss other matters such as employment information to fully understand the income components.
Applicants’ credit history
Any lender would first consider the credit profile of the applicant from information provided by credit reference agencies. Lenders would be confident to lend the required lone amount if the applicants have a solid credit profile in the UK. If the applicants have recent credit issues, it would be difficult to secure a new mortgage with a high street lender. The good news is there are specialist mortgage providers to consider applicants with bad credit.
For example, if you are looking for a new remortgage with a recent default payment on the mobile connection bill, the lender would assess the amount of payment missed, time taken for settlement, the date missed payment occurred and credit record added by the mobile connection provider. If they are happy with the available information and the applicants; ability to maintain regular monthly mortgage payments, they would consider the re-mortgage.
Employed and self-employed income
The underwriters will assess the annual income from the employed and self-employed applicants. If you are an employed mortgage applicant for refinancing services, the lender would request your latest three months’ payslips. If you receive the same basic monthly income, then the lender would annualize it by multiplying the basic income into 12 months. In case if your monthly basic income is variable over the three months, then the lender would take the average for the period.
In addition to that, some lenders would request your latest P60 document for the latest financial year. Many lenders in the UK are confident to lend money to permanent employees, either on a full-time or part-time basis.
If you are an applicant who is doing two roles on a permanent basis, one being full-time, and the other one being part-time, then the lender would consider your main income, and other income in the mortgage affordability calculation.
If you receive any monthly or annual bonus, a lender would require documentary evidence over 12 months period to consider this income in the mortgage application. The additional income could include monthly bonus costs a bonus, an oil bonus, car loans, guaranteed incentives, or any other contributions from the employer. The most important factor is to have evidence of a minimum of 12 months to evidence, the income. When you have additional income on top of your basic income, it gives you more opportunity to raise the required loan amount.
If you are a self-employed applicant, the lender would require the latest is SA302 tax calculation documents and the tax year overviews from the HMRC. Further, the daily rate contractors and fixed-term contractors would be treated differently based on their daily rate or the annual income as per the contract document.
Underwriting for re-mortgage applications
If the underwriters are happy with the income, evidence, they will instruct property valuation for the new remortgage. Most lenders in the UK would provide a free valuation, and they sometimes use a desktop valuation. It depends on the surveyor’s comments whether to run a physical valuation or to consider an online valuation.
The processing time for a remortgage application is usually from two weeks to four weeks. However, there are high street lenders who had speed underwriting, to assess and issue the mortgage offer even within one week, applicants could speak to an experienced mortgage advisor to figure out the suitable mortgage provider for the real remortgage.
In case the applicants are close to the current fixed deal end date, they should target a lender who has the ability to process the application as soon as possible. If not, they will have to pay the higher standard variable rate. After the fixed deal, period.
How does my expenditure affect the re-mortgage application?
Lenders consider the committed expenditure when assessing a re-mortgage application. For example, if you have kids, and incur monthly child-care costs, they will consider it as a commitment, some applicants try to hide this factor from the lender.
However, lenders will disclose it, by reviewing the bank accounts, and it is always advisable to disclose all related information to the lender. If you are spending a regular monthly amount for gambling or any other entertainment purpose. This might be highlighted by the underwriter. Even though it is not a credit commitment, lenders might consider it as a committed expenditure, due to the nature and risk of the transaction.
Overall, it is important that the applicants, speak to a specialist mortgage advisor for re-mortgage Services. There are many factors that you should consider before applying for a suitable mortgage. In case if you miss out on any of the factors, there is a risk of a lender declining your mortgage application, it will have a negative impact on the credit file. A mortgage adviser would increase your chances of submitting a successful re-mortgage application to have a new mortgage offer!
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up the mortgage repayments.
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