Many homeowners continue to take advantage of cheaper mortgage rates in order to pragmatically approach remortgaging and switch to lower repayments or in some cases release the monetary equivalent of their respective properties when the need arises. The popularity of this option stems not only from being a much more economical recourse but rather a necessity to improve to avoid having to move from their current residence in lieu of both stamp duty and high home prices.
As easy as it was to apply this method to remortgaging, this is no longer the case today since it’s now an impossibility to switch mortgages and reap the benefits of any equities that may have increased on the property. To this end, it’s good common practice to never made a decision without seeking the advice of professional mortgage advisers as they can secure a far better deal for you in remortgage than you would have otherwise..
How remortgaging works
For many of us, our respective mortgages could quite possibly be perhaps the highest expense that goes through our respective bank accounts. However, it doesn’t always need to be so expensive. With remortgage, its cost can be significantly reduced by allowing you the option to move to a far cheaper deal than your current and existing rate. Because of the results it can potentially yield, it’s always worth shopping around or asking your lenders for alternative remortgaging deals.
While the primary purpose that a remortgage serves to do is to land cheaper rates and minimise expenditure, it can also be utilised to release the cash value equivalent to the property. Whether you need the money to spend on any home improvement projects or pay off debts, the amount that can be borrowed is ultimately determined by the equity and value of the home.
When to remortgage
Usually, it’s far more common amongst many homeowners to consider a remortgage at the end of a current deal or term since this can help avoid having to deal with SVR or higher standard variables rates. However, it’s not a bad idea to pursue a remortgage if there’s a possibility that the rates of interest for the current pricing of the mortgage can go up. By having a remortgage arranged prior to any hikes will offer better chances of aiding you in saving more money.
It is also important to take note that lenders today are stricter than they have been in the past when it comes both income requirements as well as their assessments on whether the borrowers can cope with steeper rises in the mortgage costs and will be able to take care of repayments.
When to not remortgage
Patience is a virtue, and this statement is true when it comes to considering remortgaging. There are times when it’s a better option to stick with your current rate if not enough time has passed to assess whether switching to another deal would benefit you more. Since fixed deals generally have repayment charges if the terms is ended earlier, all of the fees combined can easily eat away at any savings that you’re hoping to achieve. To this end, it may be much more beneficial to give it a little time first before pursuing a remortgage.
At the end of the day, the desired success that remortgaging can yield often boils down to careful analysis of the trend of rates and interests, and the availability of far more inexpensive alternatives. When in doubt however, always consult a professional in the industry. This will help you mitigate the risks of making the wrong choices and increase chances of getting a better deal.