What Are The Benefits of Remortgaging?
Are you thinking about changing your mortgage? Maybe you’re approaching the end of your current mortgage term? Whether you want better interest rates or to borrow more money, there can be various benefits of remortgaging your home. The key to finding a suitable mortgage is timing and getting the right advice before you commit to a new deal.
What Does Remortgaging Mean?
Remortgaging is when you take out a new mortgage with a different lender to replace your existing one. It involves paying off your old mortgage and starting a new agreement with a new provider. By changing your mortgage product, you might be able to get lower interest rates or access to cash from the value of your home. You can usually look at remortgaging in the last six months of your current mortgage term.
Common Reasons to Remortgage
Below are some typical reasons why people remortgage their home or property:
- Lower interest rates – remortgaging could help you save money by securing a lower interest rate. If your fixed-term deal is ending, your lender may move you onto their Standard Variable Rate (SVR), which is usually higher. Switching to a better deal could save you hundreds or even thousands of pounds in repayments.
- Frees up cash – if your property’s value has increased or you’ve repaid a good portion of your mortgage, remortgaging could allow you to release equity (money). This cash could be used for home improvements, medical costs, or even gifting to family members.
- Consolidates other debts – homeowners might be able to consolidate high-interest debts, such as credit cards or personal loans, into a lower-rate mortgage. This can make repayment easier and could reduce your total interest costs. However, it will usually spread repayment over a longer period.
- Get financial control – remortgaging might enable you to switch from a variable to a fixed-rate mortgage, giving you more stability over your monthly payments. This can protect you from rate rises and help you budget during times of economic volatility.
- Change in circumstances – If your personal circumstances have changed, remortgaging can be used to add or remove a person from the mortgage. This is common after marriage, separation, or due to an inheritance, but it can also be used if you’re on a new level of income.
How Does Remortgaging Work?
Remortgaging is different to switching to a new deal with the same lender, which is called a “product transfer”. Put simply, your new mortgage pays off your current mortgage, and you’ll then start making payments to the new lender. Your new mortgage will usually have a different rate, term, and conditions.
Remortgage Your Home
If you’re looking to remortgage your home, then it’s vital that you get expert mortgage advice. If you try to repay a mortgage before the end of the current term, you could face unexpected costs and penalties. Early repayment charges could be triggered by your lender, and these fees range from 1% to 5% of your outstanding mortgage balance.
If your existing deal is due to end, or your circumstances have changed and you need remortgaging advice, I’m here to help. With access to over 90 lenders, I will simplify the mortgage process and find a suitable deal for your situation.
For remortgaging advice, book a call today.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Sources:
https://hoa.org.uk/advice/guides-for-homeowners/for-owners/should-i-remortgage-now/
