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Remortgaging: everything you need to know

One of the questions we get asked often is: Should I refinance my mortgage? It’s a great to inquire about!

Rarely do you get a loan and stay with the same mortgage for the entire term (i.e. 30 years) i.e. 30 years until it’s all paid back and you’re no longer mortgage-free (oh that’s the ideal!). It’s likely that you’ll be trying to refinance to get an offer that is more suited to your current needs and budget.

We’ll help you decide if it is the ideal moment to refinance your mortgage. We’ll go over everything from timings to types of mortgages, the risks and benefits, and how to remortgage actually is done.

What is the term “remortgage?

A remortgage refers to the process that refers to the process of arranging the mortgage for a home that you own, however you are either:

You would like to switch from your current mortgage provider to a new lender
Are you looking to take out more money than the amount you currently have to pay for your mortgage For instance, you could raise more capital to fund the cost of a remodel even if you’re with the same lender.

Click here for information on remortgage Surrey.

What are the reasons I should refinance my house?

There are a myriad of reasons you could want to remortgage your home however, here are a few of the most frequent reasons to remortgage your home…

The current deal is set to come to an end.

If your current contract expires the lender will place you on its Standard Variable Rate (SVR). This will likely be more expensive than your previous interest rate, which means you’ll likely end up paying more every month.

It is recommended to start looking for deals that are better, at least three to six months before the time your current rate expires. Talk to one of our advisors, who can assist you in switching to a better offer.

Equity release

When you make your mortgage payments each month gradually paying off your debt, and building equity. After a time you could decide to let this equity go as the basis for a new loan.

For instance, if your home is valued at PS400,000 and you have a debt of PS200,000 on your mortgage that means you have PS200,000 in home equity. You can release it in full or in a percentage of the equity you have.

Property value has increased

If your home’s value has increased since the time you taken out a mortgage, it could be that you are eligible for much less interest, which will mean less monthly payments. This is something worth a look to ensure you’re not spending more money than you have to.

You’re paying high-interest rates

Based on the date you made your mortgage repayment or the deal you went for, you might find that the current rate is more expensive than it is required to be. If you’ve seen a cheaper offer on the market, you might decide that the fees associated in a refinancing (such as an early repayment cost) are worth the cost for the savings you’ll accrue every month.

Are you looking to pay more?

It is possible that you have a better pay-per-hour job or given money, which means you’re earning more and the ability to pay more for your mortgage payments. This is a great thing! But it is not the case that all lenders let you overpay, and you may need to switch to a different lender.

This could also mean that you’ll need to pay an early repayment fee However, we’ll be able to advise whether it’s beneficial to change.

Remortgaging to finance home improvements and extension

A home mortgage is the perfect way to complete the home improvements you’ve been contemplating for a long time. If it’s a gorgeous contemporary kitchen or an extra room you want to create a comfortable space for your office at home, you could be able release the equity you’ve accumulated to finance the projects and possibly improve the value of your property in the process!

Remortgaging to purchase another property

If you have enough equity in your home, you could decide to release it to purchase a new property, like the purchase of a holiday property. The cash can be used for deposit financing or to buy a home in full. In the event of the latter you’ll have to think about whether you’re able paying off two loans at the at the same time.

Remortgaging Buy-to-let

If you’re planning to purchase another property in order for some of the properties you own to be rented out and rented out, you’ll need to look at a different process for mortgage instead of buying a new residence. The buy-to-let mortgage will be based on the revenue you’ll get from your investment.

What are the advantages of refinancing?

There are many benefits for remortgaging your home, which includes…

Examining all different mortgage options that are competitive can help you to select a loan that is suitable for your needs. You can reduce costs in the event that an interest rate reduction be offered.
If you are a homeowner currently paying SVR, or a SVR or Standard Variable Rate (SVR) You have the potential to reduce the amount you pay.
Remortgaging is a good option for homeowners who want to renovate, because it lets you take out a substantial amount of cash and will likely have lower rates of interest than the high-street personal loans.
If you are able to manage the project’s financial financing it is possible for the value that your renovation brings to be used to earn you a better mortgage.

What is the right time to remortgage?

There are specific points in the present and certain situations in which it is advisable to think about the possibility of remortgaging. This includes…

If the current contract is set to come to an end, you should
When the value of your house has increased
If you’re looking to make a higher payment on your mortgage
If you’re ready to move from an interest-only loan to a repayment loan