Remortgaging is a popular choice for many to try and lower their interest rates. It is also ideal if one’s current mortgage may no longer be meeting their needs. If you want to learn more about remortgaging and how it can benefit you, keep reading below.
What Is Remortgaging?
When someone remortgages, they are receiving a new mortgage loan with a new lender. The person is able to transfer pay off their existing mortgage balance using the new money from the new lender. Remortgaging is an ideal way to lower your interest rate and monthly payments if you have enough equity in your home. In addition, a remortgage may be an option for you if there is an opportunity to extend your mortgage term, reduce the size of your loan or change the type of loan you have.
Why Should I Apply for a Remortgage?
Remortgaging might be an option for you if you want to:
- Lower Your Mortgage Payments
Many people choose to remortgage to lower the amount of money they are paying back each month. This can sometimes be done in order to be able to pay back any other loans, like credit cards. If you are struggling to pay back your mortgage and other debts, a remortgage may help you achieve a more manageable payment plan.
- Extend Your Mortgage Term
If you want to stay in your home a little longer, a longer term mortgage may be a better option for you. Many remortgage customers can now extend their mortgage term to up to 40 years, making their monthly payments more affordable.
- Change Your Mortgage Type
If you would like to change your mortgage type, such as changing it from a variable to a fixed-rate mortgage, then remortgaging to a new lender could be a great option for you. Make sure you calculate your payments before deciding to move to a new mortgage type.
- Increase Your Mortgage Amount
If you have built up some equity in your home, you may be able to increase your mortgage amount with a remortgage. If you are thinking about doing this, make sure you request an affordability check to see how this will impact your finances.
How Soon Can I Remortgage?
One of the most popular questions people ask when they first find out they can remortgage is “how soon can I remortgage?” The answer to that, however, will depend on your circumstances. There are a few factors that are going to determine how long it will take for you to remortgage and move from one lender to another.
However, generally, there is a six-month rule to follow. Most lenders, or even the bank, would get suspicious if you immediately head for a remortgage. Just wait for at least 6 months before doing so, but it is also to note that the longer you wait, the better mortgage offer you will get.
Should I Go for a Remortgage Now?
The right time to remortgage is largely dependent on your current financial situation. Here are some questions you should ask yourself before you commit:
- Can I afford to pay off my current mortgage?
- Is it practical to do so? Should I be looking at remortgaging instead?
- Am I earning enough to be able to afford remortgaging?
- Do I have enough left over to repay any debts I may have?
- What is my current credit score? Am I likely to get a better deal with a remortgage?
These are just some of the questions you should be asking yourself. Remortgaging can be a very useful tool, but it is also a very tedious process.
Conclusion
Remortgaging can be a very useful tool when one is looking to save money and lower their mortgage costs. However, the decision to remortgage is a big one and should be made with care. It is important to know all of your options before making the leap to another mortgage provider.
If you are looking to get a mortgage, you will need to ensure that you make an informed decision. This is why you need to talk to mortgage advisors at A Move Brokers to get the advice you need. We at A Move Brokers will help you get the best deal for your individual needs, so contact us for your free consultation.
This article is for information only and should not be seen as advice or a recommendation to act. As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.