RemortgagesRemortgages

There are a number of reasons you might want to remortgage. We have produced a quick guide to help you decide what’s right for you.

The reasons you might want to remortgage may be to save money, raise money or find a more suitable mortgage.

Remortgaging to save money

You may have come to the end of your fixed rate or discounted term and your repayments have increased, so you could save some money by moving to a cheaper deal. Before you start your search for a cheaper deal, you should make yourself aware of any potential expenses involved with a remortgage which could include:

  • Fees from your current lender – these could include and early repayment charge, redemption charge or an exit fee.
  • Fees from the new lender – booking fees, reservation fee or valuation fee.
  • Solicitors fee – You will have to pay for the conveyancing work relating to your new mortgage.
  • Mortgage Broker Fees – If you use a Mortgage Broker or Independent Financial Adviser to help you with your new mortgage arrangement, they may charge a fee for their services although sometimes they receive a commission from the new lender and don’t charge a fee.

Remortgaging to raise money

If you have some equity in your property and need to raise money, remortgaging can be a way you can do it. You will obviously need to be sure that you can afford the new mortgage repayments and that you understand all the additional costs associated with a remortgage.

The most common reasons for remortgaging are:

  • Home Improvements – A new kitchen, bathroom or extension for example
  • Debt Consolidation – To consolidate other loans, credit cards etc.
  • Raising money to spend – holidays, new cars etc – but remember that you may be paying for that car or holiday far longer than you have the benefit of it.

Remortgaging to find a more suitable mortgage

There are times in life where your personal circumstances may change and you could find that the mortgage you currently have is no longer as suitable for you as it once was. For example, if you are starting a family, you might prefer the stability of a fixed rate mortgage or if you are earning more now than when you took out the mortgage, you might prefer an option to make penalty free overpayments so you can pay your mortgage off early.