Tips for remortgaging in a falling market by Halifax

Thursday, 23, Aug 2007 05:24

As house prices continue to drop, good remortgage deals are becoming more difficult to find. Here are our top tips for finding the deal that's right for you.

You don't have to cast your mind back very far to remember a time when sourcing a suitable remortgage deal was as simple as changing your energy supplier. It was just a case of shopping around as many lenders offered a wide variety of competitive deals to suit consumers' every need. These days, with house prices experiencing falls after a period of prolonged house price growth, the remortgage market landscape has changed.

It is not surprising that lenders are being more prudent about their lending and are increasingly looking to attract borrowers who have more equity in their home. However, it's not all doom and gloom. In fact many experts believe the housing market is actively showing signs of stabilising. According to figures from Halifax, the number of mortgages approved to finance house purchases was broadly unchanged in September 2008 for a third successive month, at a seasonally adjusted 33,000 compared to 32,000 in August 2008. Meanwhile, there are still some great remortgage deals out there. Here are some tips on how to go about remortgaging in the current financial climate.

1. Do your research

With mortgage deals coming and going very quickly it's important to spend some proper time doing your research. Don't just stick to comparison websites. Some deals are only available direct from the banks themselves, so it's a good idea to check out deals with the major banks and building societies directly. It is also worth investigating to see if lenders are offering exclusive mortgage deals online. You may also want to contact an independent mortgage specialist who can advise you on the whole of the market as advice can be crucial when looking to remortgage. Bear in mind that they may charge you for their time but their advice could be crucial in making the right decision for you.

2. Act quickly

By all means take your time doing your research but when you find a great deal, grab it while you can. Some lenders will let you reserve a rate six months in advance before your remortgage deadline.

3. Don't forget your existing lender

Shop around, but don't forget the bank you're with. Your lender will be keen to retain your business. Some banks offer product transfers to existing customers which may also save you time and money as there might not be additional costs involved in setting up the mortgage.

4. Consider using your savings

As the best deals are snapped up by those with more equity, it may make good financial sense to use some of your savings to pay off more of your existing mortgage. Overpaying before you look for a new remortgage deal may improve the choice of loans available to you, but check with your current lender as this can sometimes incur a fee which will be stipulated in your terms and conditions of your current deal.

5. Boost your credit score

As lenders have a duty to lend responsibly they are ensuring that all risks are mitigated when assessing a consumer's suitability for borrowing. Any blemish on your credit history can be taken into account - even something small like a missed mobile phone payment. So keep your payments up to date. You can get a copy of your credit report online with Experian, Equifax or CallCredit. Use it to correct any information and close down any unnecessary accounts. To further boost your credit score, put down a landline number instead of a mobile on your application form, make sure you're on the electoral roll and if you have more than one current account, write down the details of the one you've been with the longest.