Remortgage
Criteria:
Property Type
The first criteria which is inevitably required to benefit from a secured loan is to already be a homeowner.
Most properties are accepted for a second charge although some property types are excluded.
These tend to be high rise apartments, mundic block construction and buildings with peculiarities such as flying freeholds.
Increasingly there are also some areas which are becoming black spots which lenders will avoid because it is difficult to establish a precise value for a property.
Equity
The second requirement will be to have what is know as equity in your property.
This is the difference between the current market valuation and your existing mortgage.
In judging the amount of equity in you property it can be tempting to simply take market value away from your current mortgage.
Whist this will give you your theoretical equity in practice most lenders will not go above 95% loan to market value.
Example
| Market value | £150,000 |
| Maximum loan to value 95% | £142,500 |
| Current mortgage | £130,000 |
| Maximum secured loan | £12,500 |
Income
The third requirement relates to household income.
Affordability is a key requirement to satisfy for most types of secured loans and remortages.
Different lenders use different ways to establish income and what they count as income.
Currently the maximum loan to income ratio for most mortgage types is 4.5 - 5 times income.
Where income is hard to prove because of self employed status or other factors it is possible to self certify your income.
Credit History
The forth consideration which a lender will review is your credit history.
By comparison to unsecured lending it is possible to have a much more varied credit history and still be accepted for a secured loan.
This time the key protection a lender has should you default is your property.
Your credit history does though heavily influence which lenders you can access.
Use our FREE Credit Report to see if Remortgage is the right solution for you.
Remortgage: Main
Remortgage: Criteria
Remortgage: Considerations
Remortgage: Costs
Remortgage: Merits