“Should I remortgage?” – the answer is yes, under certain circumstances. The main reason to remortgage is to reduce your monthly repayments. Reasons why you shouldn’t include an increase in interest rates or having to pay an Early Repayment Charge (ERC).
Why do people remortgage?
There can be various reasons to remortgage but usually it is to get yourself a better deal such as a lower interest rate or a mortgage that suits your situation better like fixing the interest rate for a certain amount of time.
It may be that you wish to take out some of the equity in your property for other purposes such as an onwards purchase etc.
There are a huge amount of mortgages to choose from and therefore it is worth reviewing the market regularly to ensure you are not paying more than you need to!
Is It worth remortgaging to purchase a buy to let?
This could be worth it for people with lots of equity in their home and for those wanting to get into the buy to let market.
You can release some of the equity in your existing property to use as a deposit for the onwards purchase.
You will need to bear in mind that there could be times where the buy to let property is empty and therefore you will need alternative funds to pay the mortgage payments.
Your remortgage is going to be more than your existing and you will need to provide evidence to the lender that you are able to pay the increased repayments. They may take into consideration the anticipated rent you will receive from the buy to let property.
Can I remortgage to buy another house?
This is similar to remortgaging to purchase a buy to let however you will be living in the property yourself and no rent will be received. You will need to provide evidence that you can afford the increased repayments and if you fail to pay them you could end up losing both properties.
Can I remortgage to pay for home improvements?
Yes but lenders will most often ask for a breakdown of home improvements when you release equity from your property for this purpose.
Remortgaging can be an effective way to pay for home improvements on a larger scale such as buying a conservatory or a loft conversion. However, an unsecured loan may be a better option for smaller home improvements. We are able to advise on the best option to suit you.
Can I remortgage to pay off debts?
Yes, however the possible borrowing amount may be restricted. You must remember that consolidating unsecured debt would make it secure and if you fall behind on your repayments, the lender has the right to repossess your house. We are here to advise whether this is financially the best option for you.
Can I remortgage because I’m getting divorced?
Assuming you own your property jointly you have the following options when remortgaging during a divorce:
- Sell the property, fully repay the mortgage and split the remaining equity.
- Buy out your partner and own the property and mortgage by yourself.
- Allow your partner to buy you out of the property and mortgage.
Your existing lender may be able to transfer your existing mortgage into your name only if you wish to do so. Otherwise, it may be possible to remortgage with another lender.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.
