Remortgagers 'need good credit records'

Anyone hoping to get a mortgage or remortgage deal should try to manage their budgets so as to convince providers they are in a position to avoid mortgage arrears, according to new advice.

David Kuo, head of personal finance at Fool.co.uk, said that people without emergency funds to help with negotiating mortgages should "look very closely at how they can cut down on their spending".

Financial services providers are looking for people whose finances are in a good condition, he explained.

The need to save was described as more important than ever, as obtaining all forms of credit looks to get increasingly difficult.

"If your pay cheque comes in, you have to make it last you for a month, whereas before you could rely on your credit card to tide you over," Mr Kuo maintained.

The Bank of England this week announced the base rate of interest is being lowered to five per cent from its previous level of 5.25 per cent.

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