You may simply want a straight swap with your existing mortgage deal but want to look at better remortgage rates.
Your situation may have changed since your last mortgage deal, and this is an opportunity to adapt your remortgage to your circumstances, as well as achieve better remortgage rates.
It could be a great opportunity to pay the mortgage off faster, look at other remortgage rates or position yourself for moving home.
You may wish to remortgage for home improvements, tidy up some debts, buy a car or recoup some school fees.
The general rule is that you can borrow extra funds for any legal purpose – if it makes sense to do so.
You do need to think about what you’re doing and why and what impact that has on the remortgage deals available to you. Especially if you are looking to clear some debts. This is a very complex area and requires professional advice before you decide to proceed on that basis.
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As a Remortgage Broker with a 5-star Google rating, we have access to a wide range of lenders and exclusive remortgage deals. We can often secure a better rate than even you can with your existing lender.
We’re here to answer your questions on your remortgage property, remortgage for home improvements, or remortgage to buy a second home to help you achieve your remortgage goals.
So, when you’re considering your remortgage, you’ll want to know.
Speak to your Remortgage broker today for remortgage advice on how much you can borrow and how much it will cost for your remortgage.
Here are some simple examples of how a lender could assess your income.
A simple example.
Let’s say you earn £100,000 a year. As an estimate you can borrow around £450,000.
| Annual salary | £100,000 |
| Multiplier | £100,000 x 4.5 |
| Estimated Borrowing | £450,000 |
But the way the banks assess income doesn’t mean it always works out like that.
So, for example if you do earn £100,000 pounds, it might be that your basic salary is £50,000, but your bonus is £50,000.
Now what some of the lenders will do is take half of that bonus income into consideration when assessing your income (and some don’t take any at all).
This means for 4.5 times your income you can borrow around £337,500, rather than the £450,000 you were expecting.
| Basic salary Bonus | £50,000 £50,000 |
| Multiplier: salary | £50,000 x 4.5 |
| Borrowing: salary | £225,000 |
| Bonus as assessed by lender | £25,000 |
| Multiplier: bonus | £25,000 x 4.5 |
| Borrowing: bonus | £112,500 |
| Estimated Borrowing | £337,500 |
It is important to note that this is a ‘standard’ starting point. Some lenders will offer a lot more, some less, but this gives you a good yardstick to estimate how much you can borrow for your remortgage.
If you’re self-employed your remortgage deals are a lot more complex still.
Lenders will consider one, some or all of the following – your profit, your salary, dividends or something called your profit on ordinary activities before tax.
You might be a partner of a Limited Liability Partnership with the complexity of taking your income as drawings.
There are some upsides to being self-employed, for example, if you run a limited company, some lenders will effectively gross up your dividends, which means you might be able to borrow more than you first thought.
One of the first things to consider is the structure of the remortgage.
Do you want to opt for?
You make monthly payments and at the end of the term the loan is repaid.
With a repayment mortgage the monthly payments are higher but with less risk.
You simply pay the interest on the mortgage loan and look to pay off the loan later with say, the sale of property, investments, or bonuses.
With an interest-only mortgage the monthly repayments are lower but that does carry more risk as repaying the loan is not guaranteed.
You will also need to consider which type of mortgage product is best for you as this determines your monthly payments.
Does what it says on the tin. Your repayments are set for typically 2, 3, 5, 10 years.
This is sometimes cheaper, but the rate can go up or down depending on the market and is often penalty free which gives you more freedom.
They are the things that will effect how much the mortgage will cost, but we tend to look differently by asking – what can you afford? Your remortgage broker will then structure your mortgage appropriately, based on your risk profile.
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A fee of up to 1% of the mortgage amount may be charged depending on your circumstances (ie. £1000 on a £100,000 mortgage). A typical fee is £495 plus we will receive commission from the lender.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Rose Capital Partners Ltd is an appointed representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Limited which is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy-to-Let. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Rose Capital Partners Ltd. Registration No. 08843654 registered in England and Wales. Registered Address, Leigh Saxton Green, Clearwater House, 4-7 Manchester Street, London W1U 3AE.
