If you already have a mortgage and if your current deal is coming to an end, or you are on your lenders standard variable rate Bluebell Mortgages can help you to locate the most cost effective new deal for your requirements.
There are many reasons to remortgage…
- To save money, interest rates are at an all-time low and many people can save hundreds or maybe thousands of pounds on the cost of their mortgage. Rising property prices may mean that you will now be in a lower loan to value tier, meaning you own a greater % of your house. This means that lenders will offer you a better rate of interest due to the lower risk involved.
- Reduce your mortgage term, the most powerful money saving tool is to reduce the term of your mortgage, this one method above all others could save you the most money in the long run.
- To carry out home improvements, such as extensions or alterations to the kitchen or bathroom. Remortgaging is often the way to make your renovation dreams a reality.
- Debt consolidation, paying off nagging debts or credit cards that just don’t seem to ever go away. However, caution needs to be employed before entering into any debt consolidation mortgage. At Bluebell Mortgages, we compare the overall cost of your current mortgage and loans/credit cards with the costs of the new deal so that you know the cost implications over the long term.
- Divorce, many people going through a divorce or splitting from a partner are keen to retain their house, particularly where children are involved. They are many options for those wishing to take on a mortgage in their own name and pay off their current partner.
- Buying a car/boat or other luxury item, raising funds to do this via your house can offer you much lower rates than financing the item directly.
- Buying an investment property, many people look to property to bolster their pension pot, and their current main residence can be a good source of funds to buy an investment property outright or supply a deposit. (please see the buy to let area http://www.bbell.co.uk/services/buy-to-let/ for further information)
- Buying a student let or property for your child if they are going to university
- Provide children with a deposit for their first house, with the huge rises in property prices seen over the last few years, parents potentially have the ability to raise a deposit for their children, allowing them to get onto the housing ladder. (if you are an older borrower age 60 plus please see our Lifetime Mortgage page)
Lenders offer remortgage packages to lower the cost of switching. A remortgage package consists of a free survey of your property and free legal work to organise the repayment and to switch from your current mortgage provider.
Bluebell Mortgages will handle the whole process every step of the way by looking at your current position and identifying where money can be saved. We will locate suitable deals and work out whether it is worth paying certain costs/fees or taking advantage of lenders free surveys and legal fees packages. We also handle submitting your application to the lender and liaise with the lenders solicitors until things have completed and you have your money.
At this point you then go into our review system whereby you are contacted well in advance of your deal period end date, once again to look at finding favourable deals and shortening your mortgage term.
Where do I start?
When you contact Bluebell Mortgages for a remortgage we will…
Check your current position, work out what you owe to your current lender and your current interest rate, monthly payments and if you have any penalties for clearing the loan before a certain date. (known as ERC’s or Early Repayment Charges)
Even If you have early repayment charges we recommend starting the process up to 3 months in advance to allow plenty of time for discussion, collating documents and arranging the switch.
Find out what you can borrow so that you understand your borrowing capacity as well as what your repayments are likely to be.
The amount you can borrow, is not just based on a multiple of your income, lenders have become much more sophisticated in recent years and most now have complex affordability models that take account of your specific circumstances.
We’re all different and so are our finances, some of us may be super scrimpers and save every penny and others may enjoy the luxuries in life. Lenders need to understand your lifestyle so that they can work out the size of loan to give you.
Lenders will ask questions to work this out, they will want to know…
What you have coming in through the front door this can be whether you are.
- Self-employed (most but not all lenders will look at a 2-year average)
- Director or shareholder of a Ltd company.
- Full or part-time
- Paid bonus overtime or commission
Do you pay your debts back on time?
This is your credit rating and credit score, it’s a bit like a mythical beast with many wild rumours doing the rounds.
- Too many checks hurt my score?
- My score is 999 but I have been declined
- I have no credit therefore I am penalised.
Your credit score and credit rating are two different things but the terms are used interchangeably, your credit score is individual to the lender you are looking to borrow your money from. Lenders award points to you for certain traits.
Lender A may have had bad debts from a certain profile of customer in the past for example someone who has only been self-employed for 18 months. If this is the case they will apply a negative weighting to your score, if this is coupled with something else they deem negative such as having a small deposit and not paying a loan back on time you may not hit the desired threshold of points for them to grant you a loan.
A credit report is a very valuable tool when applying for a mortgage, you can download yours for Free at the following website (www.transunionstatreport.co.uk), or register with one of the paid services such as credit expert or Equifax.
Lenders never divulge their credit scoring system mainly as it is computer generated so you never know if you will be accepted or rejected until you try. However, Bluebell Mortgages’ highly skilled advisors have a detailed knowledge of lenders’ criteria which proves invaluable when knowing who to approach and who to avoid.
Most lenders will lend to age 70 some to 75 and a few beyond, your age matters because it tells the lender how long you will potentially be earning for and therefore able to service your mortgage.
Options do exist for older borrowers, you can find out more about this in our Lifetime Mortgages page, which you can visit here.
These could be.
- Loans (car, sofa, or holidays etc.)
- Credit cards
- Nursery costs
- Travel costs
- Maintenance (for an ex-partner or children)
- Number of children (the number of mouths you have to feed can impact your borrowing potential, lenders will make an allowance for each child within your affordability) Some lenders do also take child related payments such as child benefit and tax credits to help with this.
Amount of equity
The amount of money you have built up in your property has a bearing on how much a lender will lend you. Generally, the larger your equity the less risk for the lender and they more they will lend. As part of our mortgage assessment we will carry out an online valuation of your house to gain an idea of your likely equity and how this affects your borrowing capacity and mortgage deal.
Once we have worked out your income, commitments, likely credit score, equity and how long we are able to borrow the money for we can work out the maximum loan size you should be able to obtain.
However just because a lender says you can borrow a certain amount doesn’t mean that you should always go to that level. The driving factor behind how much you borrow is how much it will cost you to repay per month.
Factors affecting the monthly payment are.
- The Term – how many years you borrow the money over (Your age may determine this)
- The interest rate that you pay %
The term of the loan, how long you want to borrow the money for will impact the monthly payment. The longer the term the lower the payment. Lower payments can seem attractive but using the term to lower them means that you are stretching the loan out, the drawback of this is that you end up paying more interest overall.
As a responsible mortgage advisor, we will always try and find a happy medium for you with a term long enough to make payments affordable, but also as short as we can go to minimise interest.
Your mortgage is a long-term commitment from 20- 40 years, Bluebell will be there for you for the long haul.
Once your loan is set up you will enter our review system.
As part of our review process we will keep one eye on the future and so if you did take a longer term initially to reduce your payments we may suggest shortening your term at this point once you have gotten used to the monthly payment and had a couple of years of pay rises etc. Working this way can reduce or even remove any of the adverse effect of borrowing over an extended term initially.
We have worked with many clients who have taken 10-15 years off their mortgage term and indeed settled their loans way ahead of what they thought possible, using this method.
How can I be sure that the lender will lend me money?
You need an Agreement in Principle (AIP)…
An Agreement in Principle is a security blanket for you, based on our assessments we will identify a lender or number of lenders that will likely fit the bill. We will then assess your criteria and match it with the lender most likely to offer you the best loan for your circumstances. For example, this could be borrowing the maximum amount possible, so that you can raise all the funds that you need. Or look at the cheapest interest rate/fee structure, you may need a lender that is flexible if you have missed one or two credit card payments or will accept you if you have only been self-employed for 12 months. Every client is different and we have the knowledge to match you with the lender most likely to say yes!
We will need to collect supporting documents to back up your earnings (wage slips, accounts etc.) and bank statements to back up your affordability, commitments and outgoings. We will also verify your identity by taking copies of documents such as passports, driving licences etc.)
Once the likely lender and deal have been identified we will provide them with a snapshot of your situation they will also carry out a credit check (do you pay) and credit score (are you likely to pay them). If all goes well they will accept you and you then have an agreement in principle.
Bluebell mortgages will then handle the whole remortgage process for you every step of the way.
- Complete all the required paperwork on your behalf
- Submit your application to the lender
- Answers any question or queries that may arise.
- Liaise with the lenders and their solicitors until things have completed and you have your money.
- Place you into our review system so that you can forget about your mortgage and let us keep things running efficiently for you.
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