If rising interest rates are making you feel anxious about what’s going to happen when you come to remortgage, then don’t worry – you’re not alone.
Millions of people are facing significantly repayments when their current fixed-rate deal ends, prompting the question; ‘What if I can’t afford to remortgage?’
In this article, we’ll explain what happens if you can’t afford to remortgage and provide advice on how to improve your chances of passing an affordability check.
Can you be turned down for a remortgage?
The simple answer is: yes.
Every lender has their own criteria for approving a mortgage, and if you’re unable to meet them, then it’s possible your mortgage application will be rejected.
How do you know if you can’t afford to remortgage?
Lenders will perform affordability checks before accepting your application to remortgage. These review your current income, employment status, and existing debts.
If interest rates have risen since you last took out a mortgage, your debts have increased, or your employment status or income has changed, then you may find it harder to remortgage.
It can also be more difficult if the value of your home has decreased.
If you’re worried about remortgaging, contact our friendly mortgage advisors at UKMC to learn more about your options.
What happens if you can’t afford to remortgage?
If lenders spot too many red flags and believe your remortgage to be high risk, they may turn down your application.
If this happens, the most important thing is to stay calm and not panic!
Next, contact UKMC. Our team of trained mortgage advisors will ask questions about your current position and recommend the most suitable options for you.
These may include extending your mortgage term, staying with your existing lender, switching to an interest-only mortgage, adding a guarantor to your mortgage, or improving your credit score.
How to improve my chances of passing an affordability check
If your existing mortgage deal is coming to an end soon, it’s time to start planning ahead.
There are several things you can do to prepare for a remortgage and improve your chances of passing an affordability check.
You need to give lenders confidence that you can comfortably afford the repayments.
To improve your affordability, you should:
- Look for ways to increase your income
- Cut back on non-essential spending
- Reduce your debts
- Improve your credit score
You may also benefit from increasing your equity by paying off more of your existing mortgage, or saving for a larger deposit. This will help to improve your loan-to-value (LTV) ratio.
A lower LTV ratio indicates a lower risk to lenders.
Need advice on how a remortgage works or help assessing whether you can afford to remortgage?
At UKMC, we provide personalised, stress-free mortgage advice.
Our team can provide you with straightforward advice on what options are available to you, providing a transparent, tailored, and down-to-earth service.
Book a free appointment with our team.
DISCLAIMER
UK Mortgage Centre is a trading style of Refresh Mortgage Network Limited.
Refresh Mortgage Network Limited is authorised and regulated by the Financial Conduct Authority. FRN – 826982. Registered in England & Wales: 11614569.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
The Financial Conduct Authority does not regulate will writing and taxation and trust advice.
