Why Remortgage a House? Here are 5 reasons to consider.

Why remortgage a house? % reasons to do so

Why remortgage a house? We understand that mortgages and remortgaging can seem complicated especially when you hear terms like fixed rate, variable rates, tracker mortgages and so much more.

So, what does remortgaging mean and why remortgage your home?

Remortgaging is where you take out a new mortgage on a property you already own – either to replace your existing mortgage, or to borrow money against your property. Usually, you remortgage to save money or to avoid rising or lenders standard variable rates.

When you are on a fixed rate mortgage, it is important to know what your remortgage options are when that deal is ending. If you were to do nothing, you would automatically be placed on to your lenders Standard Variable Rate (SVR) which generally means a rise in your monthly repayments.

There are several reasons to consider remortgaging and the benefits in doing so could be considerable.

Let’s look at the main 5 reasons to remortgage in more detail:

1. Remortgaging for a better rate

When you switch your mortgage to a different provider you may be required to pay a small exit fee to your current provider, or there may be an early repayment charge on your outstanding loan which could be as much as 5%.

However, these extra charges could be worth the cost as you could save a huge amount of money switching providers for a better rate. As a mortgage broker we will investigate the rates offered by other lenders and work out if you will save money by switching to another lender, even if there are charges that you need to pay.

2. Current mortgage deal is due to end

Whether you have a fixed rate, tracker or discounted mortgage, they usually have a term of to 2 to 10 years before your interest rate transfers back to the lenders Standard Variable Rate (SVR) which can be at a much higher rate and cost you a lot of money over time.

To avoid automatically being placed on your lenders SVR you should look for a new deal at the latest 16 weeks before your current offer expires. At MDJ Mortgages, we advise our clients to start the process 7 months before their current deal expires so that we can ensure you get the best deal.

3. Borrowing money on your mortgage

If you have built up equity in your home you may be thinking of releasing some whether it is to pay off existing debt, upgrade your home or pay for repairs. It is always worth considering looking at other lenders as well as your current lender as switching mortgages may enable you to release more equity at a lower rate.

4. You have a greater Loan to Value (LTV)

You may have an opportunity to get a cheaper deal when you remortgage if you have a lower loan to value, the longer you pay into your mortgage the more equity you have in your home which means your loan to value is lower.

Watch our video to learn more about Loan to Value

5. Switching Mortgage Type

If you are thinking of switching to a repayment loan from an interest only loan you may not need remortgage as your lender should easily be able to make the switch for you, but it can be more difficult to switch from a repayment loan to an interest-only loan. Perhaps you want a mortgage that is more flexible, you may want to take a payment holiday or apply for an offset mortgage that combines your mortgage with your savings or current account.

Why Remortgage a house? Conclusion

There it is 5 options why you should remortgage your home when the time comes. You may be able to save yourself money over the course of your repayment term and ensure that you are always getting the best deal, improving your financial circumstances.

Whatever it is you are looking for there is always options available and as an experienced mortgage broker with access to the whole of the market we can help you find it, no matter what it is.

*Your home may be repossessed if you do not keep up repayments on your mortgage. *You may have to pay an early repayment charge to your existing lender if you remortgage. *Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

If you would like to find out more then click on one of the resources below:

Find out how much your repayments are likely to be

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Take our FREE quick and simple Questionnaire to find out how much you can borrow. Answer 10 questions and we will send you a FREE personalised  affordability assessment. All we need is your name and email address!

Take our FREE quick and simple Questionnaire to find out how much your monthly repayments are likely to be. Answer 10 questions, along with your name and email address and we will send you your FREE personalised mortgage repayment assessment.

We understand that the process of Remortgaging can be daunting and the choice of products overwhelming, this is why we have produced this FREE handy guide to remortgage to help you every step of the way. Simply leave your name and email address to download your FREE copy!

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