The past year has been a rollercoaster ride for the property and mortgage market, but if you’re planning to buy or remortgage in 2024, there are several steps you can take to help things go more smoothly.
Here’s our rundown of some of the things you can do to secure the deal you want and prevent you from paying too much.
Check when your current deal ends
If your mortgage is due to finish this year, make a note in your diary when there are six months to go before it ends. This will give you plenty of time to get in touch with a broker who can help you find the best deal to remortgage to. It also gives you the advantage that if rates fall and you subsequently find a better deal, you’ll still have time to move onto that. If, however, rates rise, you’ll have peace of mind that you’ve already secured your rate in advance.
Act now if it finishes in less than six months
If your current mortgage finishes within the next six months, then you should act now and start looking for a remortgage. The sooner you start, the wider the choice of options you’ll have and you won’t have a last minute panic trying to get all your paperwork organised.
Review your outgoings
Before you apply for a mortgage or remortgage, it’s a good idea to sit down with your bank statements to see whether there are any ways you might be able to reduce your outgoings. For example, are you paying for any subscriptions you no longer use, or could you save on your car or home insurance by shopping around rather than automatically accepting renewal quotes? The more room you can free up in your budget, the better financially prepared you’ll be if costs are higher than you expected.
Can you overpay?
If you’re still on a low fixed rate for a few more months, and you have a bit of wiggle room in your budget, think about overpaying your mortgage to reduce your balance before you need to remortgage to a higher rate. This will not only help you pay back what you owe more quickly, but it will also get you used to making higher payments. It may also help you move into a lower loan-to-value bracket, enabling you to benefit from more competitive mortgage rates than those with higher loan to values. You can find out more about whether overpayments are right for you in our guide 'Should I over on my mortgage?'
Build a cash buffer
If you’d rather not overpay for now, it’s worth trying to build a cash buffer so that you’re prepared for steeper mortgage payments when you come to remortgage. The good news is that savings rates are currently much better than they’ve been for years, so your money will be working as hard as it possibly can for you.
Read your annual statement
Checking your annual mortgage statement means you’ll have a better idea of how much you owe and how long your mortgage has left to run. This is really useful information to have when you’re looking to remortgage as you know you’ll be working with up-to-date numbers, and you’ll also be able to compare what your new deal looks like more accurately with your existing mortgage.
Get your paperwork in order
Before you apply for a mortgage or remortgage, it will help if you get all the paperwork you’re likely to need to support your application together. This will include bank statements showing how much you spend on things such as food, utilities, travel, holidays and childcare, as well as proof of your address and identity.
If you’re self-employed, you’ll need to check your accounts are up to date, which hopefully they should be as you’ll need to submit your self-assessment tax return for the 2022/23 tax year by the January 31st 2024 deadline. You’ll ideally need two or sometimes three years’ worth of proof of earnings, whether prepared by an accountant or through self assessment.
Check your credit file
When you apply for a mortgage, lenders will look at your credit history to see how you’ve managed debts in the past. The better your credit score, the lower risk you will be considered, and the more likely your mortgage will be accepted.
It’s easy to check your file online, and doing so not only gives you some insight into what a lender will see, but can also reveal whether there are any potential errors, or if you’ve been a victim of financial fraud. Remember that even something as simple as not being registered to vote at your current address can damage your overall credit score, so make sure you are on the electoral roll.
