Self Certification Remortgages
Remortgaging is one of the most productive financial decisions you can make. Often the Standard Variable Rate that most existing borrowers end upon is not the best offer that financial institutions have on offer.
In particular many people find that the only way to get a mortgage in the first place is to apply for a self certification mortgage. Due to the inability to prove income, borrowers see self certification mortgage as more risky and therefore they are liable to charge a higher interest rates than conventional mortgages. Therefore for those borrowers who get a self certification mortgage, it is particularly important to try and remortgage if at all possible.
There are certain things which will help you to get a better self certification remortgage.
- The minimum deposit for a self certification mortgage is usually 5%. However if you can save up for a deposit of 15% or even 25% of the house value then the interest rate will be significantly more attractive. This is because with a large deposit you are less at risk of negative equity and defaulting on paying the mortgage. Therefore the banks see you as a safe investment and are correspondingly able to offer a lower interest rate.
- Look around. There is a bewildering array of mortgage lenders both online and conventional mortgage dealers. It is worth checking at several different places to get a good overview and work out the best deal in the long term. Don’t allow yourself to be sold a mortgage under pressure. Initially you should just look for information. It may well be worth employing an independent mortgage broker who can dispassionately point out relative advantages and disadvantages of different mortgage deals.
- Combine a self certification mortgage with specific options which will ameliorate your particular financial situation. For example if your income is particularly volatile it is worth trying to get a good flexible mortgage which enables you to vary your payments. On the other hand if you have a significant amount of money in your current account. It may well be worth having a current account or Offset mortgage. These enable you to use your current account savings to reduce the value of the mortgage capital, leading to lower interest rates.
- Make sure to read all the small print. In particular investigate the charges and fees. If you have a large amount of capital to remortgage, generally speaking it is more important to get a good rate of interest, rather than low fees. If your mortgage principal is low. Then it is important to choose an option where the cost of fees and revaluation is low