What is a Remortgage and When Should You Consider It?
Remortgaging might sound complicated, but it's simply the process of moving your existing mortgage to a new deal. This could be with your current lender or a different one. Whether you're looking to reduce your monthly payments, tweak the length of your mortgage term, or free up some cash for big expenses like home improvements, remortgaging can be a smart choice. As your UK mortgage broker, I’m here to guide you through why and when remortgaging might be right for you.
What is a Remortgage?
A remortgage involves replacing your current mortgage with a new one, which can either be through the same lender or a new one. People often think remortgaging is about borrowing more money, but it’s not only for that. You might want to remortgage to get a better interest rate, change your mortgage term, or release equity from your property to cover large costs such as home improvements.
When Should You Consider Remortgaging?
1. To Get a Better Interest Rate - When your initial mortgage deal ends, you're usually moved onto your lender’s standard variable rate (SVR), which can be higher. By remortgaging to a new deal, you could lower your monthly payments thanks to a better interest rate.
2. To Adjust to Financial Changes - If your financial situation has changed—for better or worse—remortgaging can adjust your payments to fit your new budget. This could help manage your money better if your income has changed.
3. To Free Up Money for Big Expenses - Need cash for a major renovation or adding to your property portfolio? Remortgaging can let you release some of the equity built up in your home to fund these plans.
4. To Change Your Mortgage Type - If you started with an interest-only mortgage and now want to start paying off the capital too, remortgaging can help you switch to a repayment mortgage. This way, you start to pay down the loan and move closer to owning your home outright.
What to Think About Before Remortgaging
There are costs involved with remortgaging, such as exit fees from your current deal, arrangement fees for the new one, and legal fees. It's important to work out these costs to make sure remortgaging makes financial sense.
Your credit score also plays a part in how good a deal you can get. It’s a good idea to make sure your credit is in good shape before you apply.
How I Can Help
As your mortgage broker, I'm here to make the remortgaging process as smooth and beneficial as possible. I can help evaluate your situation, compare the best deals out there, and handle all the paperwork and negotiations. If you're thinking about remortgaging and want to know if it's right for you, just get in touch and we can explore your options together.
Whether it’s securing a lower interest rate or unlocking funds for a big project, remortgaging at the right time can make a big difference to your financial health.
Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage
