Remortgaging involves switching your mortgage from your current provider to another lender. The concept is that by doing this you may be able to get a better deal from the new provider which could include attractive rates and longer or shorter mortgage terms. It is also possible to remortgage with your current lender.
Who Will Benefit
A client can remortgage for many different reasons. One of the main reasons for remortgaging is to release equity from your home. That money can then be used for many different purposes.
Remortgaging will therefore benefit anyone with a mortgage who needs extra cash for specific purposes. This could include:
• Payment of educational fees
• Home improvements
• Debt consolidation
• Vehicle purchase
• Holiday home purchase
• Business investment
The list could go on and on.
If you decide to remortgage your home, you may find that the benefits could include:
• The opportunity to save money on your monthly mortgage payment but obtaining a lower interest or longer mortgage term
• You may be able to renegotiate a mortgage deal that is suited to your needs with the new provider
• Remortgaging may allow you to free up cash
• You may be able to consolidate your debts into your remortgage and reduce your monthly outgoings. This could see you paying a lower overall figure on your expenses.
Selecting a Provider
When remortgaging your home, it might be a good idea to compare the deals offered by providers before making your final choice. Doing this could save you a lot of money. Things you might want to look at could include:
• The interest being offered
• Any introductory periods and when they will end. You might want to check the interest rate after the introductory period
• Any arrangement fees or higher lending charges
• Will your account be sold on from the provider and if so are there any implications for you
• Are there any good deals with your current provider, they may have attractive deals in a bid to keep your business
• Any additional perks like free legal charges
In as much as remortgaging your home offers so many benefits, there are a few drawbacks.
• You could end up paying more on your monthly mortgage instalment if your loan amount goes up
• You may not always get a better deal than you were on before
• There may be early redemption penalties based on the product you choose
• If there is a cash back offer, you may need to repay this sum before you redeem the mortgage.
To ensure you have all the information, it might be wise to read all the terms and conditions so there are no surprises.
Remortgaging could be a quick and easy way to obtain the following:
• Extra cash to do with as you please
• Lower interest rates and more attractive loan terms
• An opportunity to reduce monthly outgoings by consolidating all your debts.