How Do Lenders Evaluate Your Remortgage Application?

Lenders evaluate a remortgage application in a manner similar to that used for a primary mortgage application. They will determine if you qualify based on credit, income, assets and other debts. Since this is a re-evaluation of an existing loan, though, additional factors will also be evaluated. These factors include the following:

  • The reason you are looking to remortgage your loan--Lenders will consider it very risky to work with a borrower who needs a remortgage to avoid default on a mortgage loan. While it is possible to get a loan in this situation, you may have to provide additional security, such as collateral and insurance, to the lender.
  • Factors that have changed since you sourced the mortgage: There are many positive reasons to change your mortgage. For example, you may have a higher income today and want to pay more each month. In this scenario, the remortgage lender will be very attracted to your loan as a potential source of revenue. On the contrary, you may have taken on additional debts, lost a source of income or suffered a credit problem. In this case, the lender may be concerned you will remortgage the loan again if circumstances change, and this is a red flag.