If you are interested in qualifying for cheap mortgages, you will need to be a reliable payer. The best remortgage deals are only available to customers who are statistically less likely to default on the terms of the agreement. It is not just about the remortgage search, it is about taking steps to improve the likelihood of credit approval.
Criteria for the best mortgages
The loans secured against the property will need to be significantly less than its value. You will usually find this cheap remortgage deals are offered to homeowners with a Loan-to-Value (LTV) of less than 60%. This not only demonstrates that the customer has a commitment to paying his mortgage, it makes it very easy for the bank to recover its money if you default. Work status
You are going to need to be in permanent employment, not in your probationary period or a temporary contract. Buying a home is a long-term financial commitment, so a regular source of income is considered essential. Affordability
Aside from a reliable source of income, you'll need to show that you have enough disposable income to afford to make the repayments. The more money you have left over at month end, the easier it is to cope in the event of a financial emergency. Credit status
How you have managed your credit during the last six years is recorded by credit reference agencies. If you have few debts and always pay them punctually, you are likely to have very good or excellent credit. You are the sort of customer that the banks want. If you've had credit problems, you'll need to take steps to rebuilt your credit rating prior to making an application.
Improve your chances of approval
Pay your debts on time
If you aren't already doing so, you must comply with the terms and conditions of your credit agreements. If you consistently pay your bills punctually, this will provide a welcome credit score boost. Don't max-out your credit cards
Use your credit and store cards, particularly if they have any age, but never utilise the full limit. In fact, most experts agree that you should only use 30% of your credit limit in a single month. Reduce your debts
The less money that you owe your creditors, the better your credit rating. If you do have any savings, use them to pay off some of your debts. It'll help to increase your level of disposable income. Fix credit report errors
If you haven't already done so, order a copy of your credit report from Experian, Equifax and Callcredit for £2 each. You can then scrutinise the information and get any mistakes corrected prior to applying for any remortgages.