Getting a mortgage on your home is a significant life-decision. However, getting a remortgage is a sign of financial prudence. Going for a remortgage means that you have a financial plan in place and are willing to:
a. Decrease your debt load by taking benefit of the lower interest rate available in the market.
b. Participate in the increased value of your home.
c. Get extra debt for paying off an immediate or unforeseen expense.
A mortgage deal can take anywhere between 4-6 weeks to come to fruition. The length of this process depends on your advisor, income status, the peculiarity of the case, and the completeness of the documents you submit. If you plan to get the best remortgage deals, here are the documents you should keep handy:
1.Documentation from Your Former Mortgage:
The lenders would be interested in knowing the interest rate on your last mortgage to assess the risk associated with your profile. You don’t have to worry about the high-interest rates available earlier; if your face has improved or the market has shifted to a new interest rate, you will get a benefit of it.
The new lenders would also be interested in knowing about the repayment schedule and the frequency of payments. This will help the lender understand the entire repayment structure and what amount of debt you have already paid. If you are working with the same lender and trying to take advantage of a renewed interest rate available under some other product, you might not need this extensive list of documents.
Ensure you compare remortgage deals, even if your current lender rates are lower than what you are paying. It is uncommon for lending rates to go down in isolation, and hence it will be worth your time to go through the available deals in the market.
2. Income Proofs:
You can use these documents to show your income. Generally, the lenders would verify your payment using your last six months’ bank statements, previous three months’ pay-slips, proof of bonuses/extra income, and Form P60 that shows the payable and paid tax from the last few assessment years. Having all these documents curated into one folder will expedite your remortgage approval process. If you are self-employed, you can use the Form P60 and your bank account statement to show your income.
3. Address Proofs:
The lenders would be interested in knowing all the places you have lived in the last 3-5 years. The period under consideration may change as per the lender you choose. The term ‘lived’ generally refers to staying in one place for a substantial time, and not any weekend or vacation stays. Ensure you have proofs showing all the places you lived since most lenders would not appreciate any address proof gaps. You can use utility bills or rent receipts to show the addresses where you have lived in the most recent past.
4. Insurance Proof:
All houses that are to be remortgaged have to be covered with insurance. This also helps you get the best remortgage rates as the lender is not dealing with major property damage risks. You will just need the insurance contract and your premium payment schedule.
5. Advice of Your Mortgage Broker:
While most lenders don’t ask directly for this, if you have a mortgage broker’s advice available on paper, it would help you expedite the remortgage approval process. Depending on the lender, you might need the mortgage broker’s advice in circumstances like mortgage period running into retirement, infrequent income, and so on. Having a mortgage broker will also help you easily compare remortgage rates.
(The list has been populated using extensive research conducted on the documents necessitated by banks, lenders, and mortgage brokers in the UK. To get the binding list of documents, please write to us at firstname.lastname@example.org and get the best remortgage deals with no fees.)