Should I Remortgage?
If you’re considering remortgaging but aren’t sure where to start, we can help you figure out if it’s the right route to go down and when to start proceedings.
Remortgaing HomeWhy should I remortgage?
A key reason people might remortgage their home is to get a better interest rate. You might have realised that you’re paying more than you should, or your financial circumstances might have changed meaning that you now want to shorten or extend your mortgage term. Either way, the idea of lowering your monthly mortgage payments makes remortgaging an attractive prospect. Remember though that some lenders will charge you an early repayment fee and possibly an additional exit fee if you remortgage from an existing deal that’s still on going.
Many people remortgage because their initial mortgage period comes to an end. When this happens, your lender might start charging you higher rates – that’s why some people look for a remortgage at this time.
Another reason people might remortgage is to unlock some cash from their property to use for something else e.g. debt consolidation or home improvements. If this is what you’d like to do, it doesn’t necessarily matter what you’re planning to use that money for. However, many lenders will use that information to inform what rates they’ll put onto the remortgage. Lenders might also put a cap on the amount they lend to you in this way – this would usually be based on the value of your property.
Sometimes people remortgage their home because they want to increase their monthly payments as a way of paying off their mortgage sooner. They might do this if they’ve had a promotion at work or if they’ve inherited some money. It’s worth bearing in mind those pesky early exit fees that your lender might charge you if you remortgage too soon.
Some people remortgage their home because the value of the property has gone up. This gives people a chance to release that extra cash that’s built up in their property over time.
Downsizing or turning your home into a buy to let are some more reasons people might remortgage.
When should I remortgage?
This is where things begin to get a bit more complicated. Deciding when to remortgage can really depend on several factors:
Are you remortgaging before your current deal ends?
If your current mortgage is coming to an end, you might find that your mortgage will automatically switch to a slightly more expensive version. If this is your situation then you should really start looking for your remortgage around four months before your current deal is due to end. Because of the complexity of getting a remortgage, it’s best to leave as much time as possible so that you have the best chance of getting a good deal.
Look out for any penalties or fees
Some lenders charge penalties or fees for changing to another mortgage provider. These costs can be steep so it’s important that you check your paperwork before you apply for anything. The costs are usually calculated by the lender as a percentage of the initial loan.
Are there any reasons I couldn’t remortgage?
You need to have lived in your current property for at least six months before being allowed to remortgage. This is a legal requirement. In some situations, this requirement doesn’t count – for instance if the property is inherited or if a sibling buys out their sibling.
For more on what remortgaging is and help with getting a remortgage, please don’t hesitate to get in touch with us or fill in the form below and we’ll get back to you with a quote and some help with starting your remortgaging process!
