How To Remortgage a House
Remortgaging a house is made simple with our professional advice. Remortgaging means moving your mortgage to a new lender while living in the same property. It is a great way to reduce your monthly repayments, take some money out of your home for a big purchase or pay off your debts. Remortgaging is a similar process to standard mortgages, but the process can be a little different than others.
Remortgaging a House
If you currently have a mortgage or own your property completely, you can remortgage a house, which means getting a new mortgage, either with your existing lender or choosing a new one. Even if your current mortgage has a longer duration of years, you don’t have to stay tied to the same one for the full term. How much is your property worth, and what kind of loan-to-value do you want? Working with a professional remortgage broker is the smartest move to make remortgaging simple and easy to get the right deal.
Why would you need a remortgage?
There are several reasons why you want to remortgage. Whether you want to get a better deal or take out some extra money, it can work for lots of situations.
Why Would You Remortgage?
There is lots of reason why you should remortgage:
Better Interest Rate
If you originally took out a fixed or variable rate mortgage, you will normally revert to your bank automatically at the end of its term. This is significantly higher than a normal rate, so most people choose to remortgage at this point to save money on interest. Also, as you will have paid back a chunk of your loan through your existing mortgage, you will be remortgaging at a lower LTV than before. It is the amount you are borrowing as a percentage of the value of your property – so you will likely be borrowing fewer amounts as compared to the value of your house, which will give you a lower LTV.
Consolidating Your Debt
If you have other forms of debt, like a personal loan or an outstanding credit card balance, you could remortgage to free up money from your house or land to pay them off. The interest rate is relatively lower than your other debt as it is secured against your property, so this could allow you to make repayments easily. And as your debt will all be in one place, you will only need to worry about making repayments each month.
But move forward when you are 100% sure as you could end up having your property repossessed if you cannot keep up with your mortgage payments. If you are unsure, speak to a professional property finance broker.
Get Debt-Free Faster
It might be a case that you will often be charged by your lender for paying back too much of your mortgage too soon. So, if you are willing to be mortgage free and you can afford it to get more leverage, over-payment terms could allow you to back your loan more rapidly.
When you are planning to renovate a kitchen or any other space of the house, many people choose to remortgage their home to free up the capital to pay for it. Because you will have paid back a portion of your original loan, you could remortgage at the same LTV as you did earlier but get an amount of cash back to spend on refurbishments. Working with a professional might be the safest option when you are thinking of remortgaging.
Before you make a decision, you should know there are a lot of benefits of remortgaging a house. It has some drawbacks too.
- You can move a great deal according to your needs.
- You could get a better interest rate.
- You could find better mortgage deals.
- There are some fees associated with remortgaging.
- You could have to pay for early repayments.
- If you are close to retirement, there are high chances that you may find difficulty in getting a new mortgage.
Keeping it in mind, choose what best suits your situation.