Should I Remortgage?

MortgagesRM - Doncaster Fee Free Mortgage Advisor | Remortgages

A Remortgage is where a person takes out a new mortgage on a property you already own, either to replace your existing mortgage, or to borrow money against your current home.

For those who don’t know, as you could have been a First-Time Buyer looking to get a new Mortgage deal – A Remortgage is where a person takes out a new mortgage on a property you already own, either to replace your existing mortgage, or to borrow money against your current home.

At this time of year, you’re more than likely to hear more things about Home Alone than Home Loans, but around a third of all Home Loans made in the UK are actually Remortgages. This guide spells out when you should or shouldn’t Remortgage.

Think Carefully About Remortgaging

For most people, mortgages are the biggest financial commitment and it follows that streamlining the largest debt can produce the largest saving such as, £1,000s each year. If you’re the kind of person who window shops looking for the best deal on Televisions or mobile phone contracts, then you’re going to be missing a trick by not using the same skills ton save money on your mortgage.

But what are the pros and cons to Remortgaging? Here we start off with talking about the reasons why you might want to Remortgage – if you need more Support, you can Doncaster’s Fee Free Mortgage Advisor, Stephen Kerrigan who can help you through the process.

The main reason why you might want to Remortgage is to save money, and this can HUGE money, as Jimmy from Doncaster mentions:

“My old fixed-rate mortgage came to an end two years ago and I have been waiting for that time to set up another deal. This is where Steve came in and prompted me to do it. I saved £569.92 per month by switching from a variable to fixed rate at 2.99% for the next five-years with Santander.”

Many of the best mortgages only last a short time – often two to five years – the typical length of time offered on a fixed rate, tracker or discount mortgage. When it comes to an end, your lender will put you on its bog-standard variable rate (SVR). It’s likely to be higher than your old interest rate and higher than the best buys available. If so, you want to be ready to Remortgage to a cheaper rate. Start looking around 14 weeks before your rate ends.

If you are tied into an initial deal then you might have to pay an early repayment charge which can be huge, often 2-5% of your outstanding loan. Plus, there is usually a small exit fee (it might call it an ‘admin fee’ or a ‘deeds release fee’) when you repay any mortgage. This doesn’t mean you shouldn’t consider it as the savings can be huge (especially if you have a large amount of mortgage debt). You just need to do your sums before taking the plunge.

Perhaps your current lender has said no to lending you extra money or the terms its offering aren’t very good. Remortgaging to a new lender might enable you to raise money cheaply on low rates. But remember to take all the fees into account to see if it really is cheaper than other forms of borrowing.

The new lender will ask you what the extra money is for. Surprisingly, it is likely to be more comfortable with you borrowing the money for a new car than for business purposes.

What does Stephen Kerrigan Say?

“When people talk about adding non-housing debts to their mortgage, I shiver! It doesn’t matter if it’s for a new kitchen, a holiday or to consolidate existing borrowing. There are times when this could be a necessary evil, perhaps to get you out of a hole. In fact, it is often a good move, but the issue is many people see it as a no-brainer solution.”

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