WHAT IS A REMORTGAGE?
A remortgage is when you replace your existing mortgage on a property, with a new mortgage. The property will remain the same, but the remortgage in itself can have many financial benefits.
Many homeowners choose to remortgage, as it means they can benefit from a better mortgage deal and decrease their monthly payments. This allows homeowners to save a lot more financially and reduce the time it takes to pay their mortgage back.
Homeowners also have the option to borrow more money against their property to pay off debts such as credit cars and loans, or even carry out any desired home improvements.
Owning a home is a keystone of wealth – both financial affluence and emotional security – Suze Orman
There are numerous benefits of remortgaging and it is something that all homeowners should consider, as there are thousands of people who are currently sitting on the variable rate and could benefit by securing a fixed rate for their mortgage.
We will now look at the aspect of when and why you should remortgage in further depth.
WHEN SHOULD YOU REMORTGAGE?
As discussed above there are several reasons why a person may wish to remortgage and below we will consider some further reasons which a homeowner may consider when remortgaging:
1) The value of your property has increased so you feel that you may benefit from a better interest rate.
2) Your current deal is coming to an end and you want to benefit from a lower interest rate
3) You wish to overpay on your mortgage but you do not have the current flexibility to do so.
4) You want to take advantage of other financial benefits, which are not being offered by your current provider.
REASONS WHY YOU SHOULD CONSIDER REMORTGAGING?
1. You Want to Borrow More Money
Remortgaging allows you to release some of the equity you have built up in your home. This may benefit you if you wish to buy a new car, pay off any debts or even carry out any home improvements.
The one thing to consider is prior to borrowing any additional funds on your mortgage, it is essential for you to obtain professional mortgage advice to ensure you make the right decision.
2. You’re Looking for A Different Type of Mortgage Deal
Over time your financial and personal circumstances can change so a mortgage which was suitable for your 2 years ago may not be suitable for you today. It could be that you may wish to fix your mortgage over a longer period of time, or you may wish to have fluctuations in your repayments, as this is something you are comfortable with. Everyone’s situation and personal finances vary, so it is essential that you have a mortgage which suits your needs and circumstances.
WHEN TO APPLY FOR A REMORTGAGE?
It is always beneficial to consider remortgaging a few months prior to your existing deal coming to an end. This allows you to plan what you want to do for the future and how you want your mortgage to work for you going forward. It is essential to do your own research and speak to a qualified mortgage broker who can advise you in relation to this.
It is also important to bear in mind that an average remortgage, takes about 2 months to complete. Therefore it is essential that you look into this prior to your existing rate coming to an end. The last thing you would want is to be automatically moved on to your current Lenders Standard Variable Rate and be paying more than you need to.
I hope with the information provided above, you will have a better understanding of remortgages. Please feel free to leave your comments below.