Nottingham BS: 1 in 7 remortgage deals rejected

Posted on Tuesday, December 15 by Joy Tibbs

One in seven homeowners who have tried to remortgage in the past two years failed to secure a new deal either with their existing lender or a new lender, according to research from Nottingham Building Society.

The main reasons for rejection were tighter affordability rules under new mortgage market regulations and issues with credit records, the study revealed. However, 11% said they were turned down for being too old.

Rejection ended up costing ‘mortgage prisoners’ (those who were unable to remortgage), with just over a quarter seeing their monthly payments increase and 8% experiencing substantial rises in costs.

Despite this, figures from the Council of Mortgage Lenders reveal that the number of remortgage loans reached 31,000 in September with a total value of £5.1 billion compared with 27,900 and £4.3 billion at the same point in 2014.

Furthermore, Bank of England statistics show that remortgaging can save customers substantial sums, with the average standard variable rates at 4.5% cut to 1.9%. This could generate savings of approximately £430 per month on a £200,000 deal.

Ian Gibbons, senior mortgage broking manager for Nottingham Mortgage Services (NMS), part of the Nottingham BS, said: “With rates remaining low it is potentially a good time to remortgage to a new deal, but unfortunately it is not always that simple.

“With more than a quarter of those who have tried to remortgage in the past two years not being able to secure a new deal it is clear that homeowners need to think carefully and research the market.

“People’s circumstances change and seeking help from a broker to get an independent view on the best deal available to a customer is a very sensible approach.”

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