What Is Remortgaging?
Remortgaging refers to shifting from your current mortgage lender or changing the mortgage package you’re on while still retaining the same lender.
With most mortgage terms lasting 20-30 years, it can be very restraining to have to stick to the same lender or same payment plans over the same duration. This is because there are always new mortgage plans being introduced into the market. One’s financial situation may also change and one may want to decrease or increase their payments. A home owner may also want to borrow against their equity or move homes. This will mean altering their payments or changing them altogether.
Why Should I remortgage my home?
If you find that there are better mortgage plans available than what you’re on, you should think about remortgaging. However, one should consult an independent mortgage consultant to avoid making erroneous moves. Mortgage plans contain numerous variables that one should understand before making a move.
If your current mortgage plan is almost expiring, you should start thinking about getting another package within or outside the current lender.
Most mortgage plans are fixed for a certain duration. After the formative years of a mortgage plan, most home owners are switched to the standard variable rate (SVR) which is slightly higher that what they have been enjoying. If you are paying a mortgage based on a SVR, you can seek to remortgage so that you can enjoy lower rates than you are paying.
However, one should be cautious when remortgaging to avoid paying fees that could dissolve any financial gain that a remortgaging would offer. Changing a mortgage plan before maturity often attracts a fee. There could also be application and valuation fees with the new mortgage plan especially if using a different lender.
If your financial income has changed, perhaps for the worse, remortgaging can be a good idea so that you can enjoy more favorable payments as you find your footing. Mortgage payments are usually based on one’s income which could go up or down with time. In such a case, one would get some time to adjust their income or find another job.
Benefits of remortgaging
The primary objective when remortgaging is to save money on the payments. No one intends to pay more than they have to. With so many mortgage packages available, home owners are always looking to find better deals. Remortgaging could save you thousands of pounds each year.
Another reason to remortgage is that you could potentially pay up your home sooner. If you get a better mortgage plan, you can play off more due to the reduced interest. Alternatively, you can increase your repayments and enjoy less fees and a lower rate and thereby pay off your mortgage even sooner.
County Conveyancing are the leading conveyancing solicitors in Bristol and throughout the United Kingdom. If you need an instant online quote for conveyancing , whether you are buying , selling or remortgaging a home, visit our website and get in touch with our highly experienced and motivated group of staff.