Remortgaging can help you to manage your finances. As your life and your finances change you can look at changing your mortgage too. You don’t have to stick with the first mortgage you take out.
Think carefully before securing other debts against your home.
In this article, we’ll look at the key things you need to remember with remortgaging.
When Does It Make Sense for You to Remortgage?
Every mortgage borrower has their own financial situation. So you need to understand your finances (both your income and living costs), why you want to remortgage and whether it’s the most suitable time for you to remortgage.
To help you make that decision, get information and advice on the mortgage deals available and how they’ll affect your finances.
1) Should You Remortgage When Your Mortgage Deal Ends?
Your mortgage may start with a lower interest rate. But when this deal ends your lender is likely to move you onto the Standard Variable Rate (SVR), which is often higher.
As your mortgage payments are likely to rise, you may think about remortgaging to benefit from a different offer with another lender. However, check the costs of remortgaging vs the potential savings on a new mortgage deal.
2) Remortgage to Release Equity: What You Need to Know
When you own more of your home, you can consider remortgaging to release some of the equity as cash.
Remember to be clear why you want to use the equity though. Also consider the impact on your Loan to Value (LTV), interest rate and mortgage payments. Then weigh up the costs of remortgaging against the benefits you’ll receive.
3) Remortgage to Consolidate Debt: What You Should Do First
If you have personal loans as well as a mortgage, you may have thought about remortgaging to consolidate your debts.
However, mortgages and personal loans are different types of debt. So whilst you often pay a lower interest rate on your mortgage, it’s usually over a much longer period. As you can end up paying back more interest in total, consider other options first to clear your debts.
4) Should You Switch From an Interest-Only Mortgage to Repayment?
Remortgaging with an interest-only mortgage is now harder because lenders have stricter rules to check how you will repay the capital on your mortgage.
However, one option is to move from an interest-only mortgage to a capital repayment mortgage.
5) How to Find Remortgage Deals
Once you’ve decided to remortgage you’ve got to choose which deal to apply for.
You can search online for deals from different lenders. Remember to check the rates, fees and other costs as well as the small print of the offers.
An alternative is to talk to a mortgage broker and let them search the market and recommend the best deals for you.
Please Note: As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.
If you would like to speak to us about remortgaging or reviewing your existing mortgage, please email us email@example.com.