Why You Can’t Get a Remortgage With a Stable Income
Just as some first-time buyers find being turned down for a mortgage incredibly frustrating because they're already paying more than the mortgage repayments in rent, finding you can’t get a remortgage can be very difficult.
There are likely more reasons than you might imagine that you could be told you can’t remortgage due to affordability, even if your income and finances are stable and relatively high. Examples include:
- You can’t get a remortgage because you’ve nearly paid off the loan. Lenders aren’t keen on applicants with low balances because the interest they stand to earn on your business isn't worth the administrative time it might take to assess your application.
- You can’t remortgage due to affordability because the lender won't consider a variable income. Niche lenders normally average out your annual earnings. In contrast, a bank will often consider only your basic salary, disregarding bonuses or other income that makes up a large proportion of your means to repay a remortgage.
- Can I remortgage with an IVA or other bad credit history? Adverse credit can make it difficult to remortgage with a bank since any issues on your credit report will mean they perceive your application as high risk.
Is remortgaging easier than getting a mortgage? Generally, yes, but if you would like to borrow at too high a Loan to Value (LTV) ratio, you might find you can’t get a remortgage for as much as you want. The LTV is the difference between your property’s value and your outstanding mortgage.
Lenders tend to set LTVs up to a maximum of 90%, so even if you’re confident you can keep up with the repayments, a lender might decide you can’t remortgage due to affordability because your requested loan is higher than their thresholds allow.
What to Do if You Can’t Get a Remortgage
The first step, if you’re advised you can’t get a remortgage or are concerned that you can’t remortgage due to affordability, is to speak with our independent team to evaluate the potential solutions.
There may be simple options, such as applying to a lender whose affordability criteria align with your circumstances or where there are remortgage products with the LTV you would like to borrow.
You may also be able to improve your chances of approval by assessing why you can’t get a remortgage and taking proactive changes to strengthen your application.
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1. Check Which Lenders You Can’t Get a Remortgage With
Even if your application looks clear and straightforward, if it doesn’t fit within the lender’s policies, they will automatically decide you can’t get a remortgage with them or can’t be approved for the specific product you have selected.
As a whole-of-market broker, we start with your requirements and circumstances and then find the right lenders and products to suit rather than applying with the hope that the outcome will be positive.
2. Improving Your Finances if You Can’t Get a Remortgage
Making overpayments on your current mortgage (where permitted) and maintaining a good history of on-time payments can help if you are able to delay your remortgage for a short period. Reducing your mortgage balance means you can remortgage for a lower value, which could solve the reason you can’t get a remortgage.
Paying down short-term debts such as credit cards and overdrafts will also help if you can't get a remortgage due to affordability because of other debt repayment obligations.
Reducing outgoings and working on a household budget can also be a good way to improve your financial position ahead of a new application if you’ve been told you can’t get a remortgage because your income less outgoings is not sufficient.
3. Repairing Your Credit Score if You Can’t Get a Remortgage Due to Your Credit History
Credit scoring is slightly different from affordability but can be a factor in why you can’t get a remortgage because a low credit score or history of adverse credit issues will mean some lenders cannot offer a remortgage at all, and others will charge higher interest rates.
Registering to vote, repaying debts, removing errors from your report and making on-time payments can help improve your credit score if you're worried about can I remortgage with an IVA on my file or any other credit events.
Professional Help If You Can’t Remortgage Due to Affordability
Finding out you can’t remortgage due to affordability can be disheartening, but there are often options to apply to a more suitable lender, or for a better-aligned product, or to look at your circumstances and mortgage position to decide on the best route forward.
Getting in touch with an expert brokerage team can help you obtain the best mortgage deal for you and Revolution Finance Brokers are the way to go.
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