If you are looking for ways to manage your current mortgage even better, you probably have come across remortgaging as an option. This article will help you understand what it is and how it can help you with your current financial situation.
Unlike what most people think, a remortgage does not mean applying for a second mortgage from your current lender. It is the process of applying for a new mortgage with a new lender while staying at your current home. Once approved, this new mortgage will replace your existing one.
When Is Remortgage Ideal?
Remortgaging is a good option if you find yourself in the following situations:
- You are looking for a better deal than what you have now with your existing mortgage lender. Since time can increase your property value, your loan-to-value ratio should decrease over time. For that reason, you should potentially be able to find a deal that may be better than your current mortgage.
- Your current mortgage deal is coming to an end. Remortgaging gives you the opportunity to secure a better deal.
- You already moved to a follow-on rate or your lender’s standard variable rate (SVR). You have the option to look for a more economical follow-on rate so that your monthly repayments get lower.
- You can afford to pay the amount over the total mortgage duration.
- You plan to consolidate other debts into a single one.
Whatever your reason for choosing to remortgage, make sure you seek mortgage advice from a good mortgage broker.
What You Need to Know About Remortgage
Before you decide to push through with this decision, here are some facts you need to know first about getting a remortgage:
- If you decide to get a remortgage, you need to know what the current mortgage lender would charge you. Sometimes, they would ask for an early repayment charge or an exit fee. It would be best to know these details ahead of time. You can double-check with your current mortgage lender or check your documents.
- Decide on what kind of loan you would prefer. Would you like to have a flexible payment or a fixed rate? Base your answer on what your financial situation allows.
- Remortgaging involves securing a new mortgage. Your credit score will again be a factor. Make sure that you have good credit so that you can secure a better loan.
- Using mortgage calculators online, you can find how much you can borrow and what deal is ideal for your current situation.
- Lastly, make sure that you ask for all the available remortgaging options so you can weigh your choices better.
If you decide to apply for a remortgage, the process will take around four to eight weeks. Make sure to consider that in your timeline.
Conclusion
Different things happen to everyone all the time. Sometimes these events bring significant, unexpected life changes. Your past decisions or current setup might no longer be ideal for your needs and lifestyle.
One of your many options to deal with the financial change is remortgaging. Before finalizing your decision, make sure that you assess everything from different angles. More importantly, make sure that the deal you get will help you in the long run.
Are you looking for new mortgage lenders in the UK? A Move Brokers are the best mortgage brokers for finding the right bank or lender. We use our knowledge and experience to get you the cheapest deal based on your circumstances. Call 01244 478780 and speak to one of our specialists today.
This article is for information only and should not be seen as advice or a recommendation to act.
Think carefully before securing other debts against your property
As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.