New Build Remortgage

New Build Remortgage

Gary talks us through the process of remortgaging a new build property.

Why remortgage my new build property and what are the reasons for doing this?

There are lots of different reasons why you might remortgage. It could be a simple case of a like for like remortgage to put yourself onto a better deal than your lender’s standard variable rate. There could be capital raising for things like home improvements, debt consolidation, a new car or even a big family holiday.

With all these things, you need to be very careful before securing debts on your home – as your home could be at risk if you don’t keep up with the payments.

How does remortgaging for a new house work?

There’s no real difference in terms of remortgaging a new build property. Most lenders only class it as a new build for a couple of years. The shortest deal that most people take is for two years. By the time you get there, it will just be considered a standard property.

How long do you have to own a property before you can remortgage?

There are lenders that would allow you to remortgage the day after you purchase. But more typically, it’s either six months or 12 months from when you buy the property until most lenders would allow you to remortgage.

Can you remortgage a new build with no proof of income?

The answer is technically no, and that’s true whether it’s a new build or not. Typically a new lender will want to see some proof of income to make sure that they’re lending responsibly and you could afford the repayments.

But we might be looking at a product transfer, where you take a new deal from the same lender instead of going somewhere else. If you’re doing a product transfer on a like for like basis, and not borrowing any additional cash, most lenders will not need to see further proof of income – as long as you’ve been keeping up with the mortgage payments thus far.

Can I remortgage my new build property if I have bad credit?

Yes, but there’s a few caveats. As we cover on the adverse credit podcast, it depends what’s registered, when, how much it was for and whether it’s settled.

If you feel like you have some adverse credit, discuss it with us, give us as many details about it as you could, and we could look for a lender that will be happy with those circumstances.

Can I be declined a remortgage on my new build property? Why would this happen?

Yes, you could be declined. There are different types of decline – there could be a maximum loan, where a lender will still be happy to lend to you but at a lower amount, because that’s what their affordability calculators are telling them.

You could be declined because of adverse credit. There could also be other reasons in the background, which we could spend all day speculating on. Again, if you’re not sure about something, come and tell us about it.

Let us know all the details and we will do our homework on your behalf and find not just a good lender, but the right lender for your circumstances.

How can I better my chances of a good remortgage?

Preparation is always key and if we get that right, it will make the back end of the process significantly smoother. From a documentation point of view, gather three months pay slips, or if you’re self-employed, two years worth of accounts or self-assessments.

You typically need three months’ personal bank statements and some proof of ID, typically your passport, and some proof of address. That could be your driving licence or a utility bill.

Always say make sure your bills are up to date and paid on time, make sure that you are registered on the voters’ roll. All these things will give you the chance of being successful in any mortgage application, not just a re-mortgage.

What are the benefits of remortgaging?

When we look at the individual reasons you might remortgage on a like-for-like basis, it could well be that it’s cheaper than going onto the lender’s standard variable rate.

But it doesn’t mean it’s right for your circumstances. There are always reasons why you might do something a little bit different – if you’re capital raising to do some home improvements, for example, it may not be possible to borrow the amount of money that you need on an unsecured basis.

Borrowing against your house would allow you to potentially access more money. And of course, it’s spread over a longer period, which helps keep those monthly payments down.

We always recommend the shortest affordable term, so that you pay less interest overall. There are different benefits, mostly coming down to managing month by month costs.

Is there anything else we need to know when it comes to remortgaging a new build property?

A really good mortgage advisor will always make sure you get the right deal – which doesn’t necessarily mean the lowest interest rates or the lowest fees.

Sometimes it’s about the circumstances, and which lenders would allow you to raise capital for different reasons. Of course, the golden rule of borrowing is to borrow as little as we could and pay it back quickly, to keep the overall cost as low as possible. That’s what we will do in terms of the remortgage.

The most important thing is to tell your broker as much as possible about your circumstances. Just make sure you’re really clear about what it is that you’re looking to achieve. Give us a full picture of your situation and then a really good advisor will make sure that you get that perfect deal.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.