Remortgaging has become an increasingly popular money-saving approach amongst homeowners who are looking for better rates than what their current and respective deals are. Because mortgages can often put a sizeable dent in the bank, it’s not just an option that should be considered especially by those who can ill-afford the existing repayments or perhaps need the cash value that is currently locked within the property. As effective as remortgaging can be to save money and reduce overall expenditure in the long run however, the desired results that it can produce depends on knowing exactly when to pursue it. It isn’t a decision to be taken lightly since a mistake can have the opposite effect of the intended purpose and end up costing a lot more than it’s worth. So, when should you remortgage?
Below are typical situations in which you must consider a remortgage.
Consider remortgaging near the end of a deal or term
The reason why many borrowers tend to only remortgage near the end of a particular term is to prevent having to deal with the higher costs associated with the standard variable rate or the SVR as it is more commonly referred to as. Because of the potential of getting fixed rates far below the average SVR, the potential to achieve significantly high savings from minimising your current repayment is not only possible but probable.
Trend for mortgage and interest rates are going up
Another tell-tale sign that a remortgage may be in order is when the trend for the interest rates and mortgages are going up. Since the base interest rates is a crucial determining factor for pricing mortgage credit, its rise can heavily affect the pricing on both the trackers and the fixed rates. To this end, you’ll be able to potentially save a lot of money by making the necessary arrangements to pursue a remortgage prior to this happening.
Whether you need to spend a significantly large sum of money on an event like a wedding or perhaps home improvement projects, it’s oftentimes better to consider a remortgage rather than dipping into your current savings. In this way, you’ll be able to take better advantage of any equity increase that your property achieves and use this to release the necessary cash. It’s well-worth noting however that this should only be done if the home’s value has gone up and if the repayments can be afforded since you’ll be getting a lot less out of the deal otherwise.
Considerations for remortgaging
Prior to making any decisions to pursue remortgaging, it pays to seek and acquire the services of independent advisers and professional in the industry first. Since you’ll be able to make a far better informed decision by heeding their advice as opposed to merely going with your gut instinct, they can be invaluable in ensuring that you are able to get the best deal possible or perhaps consider other viable options if a remortgage is just not logically feasible. While these services come with their own respective fees, it’s an investment well-worth taking especially because you’ll be increasing the chance of acquiring the best possible results.
While a remortgage can yield a great deal of advantages and benefits, it’s not necessarily always the right approach to take. By taking the time to carefully consider all alternatives as well as weighing the pros and cons of remortgaging, you’ll increase your chances of getting the most out of it. It’s also good common practice to never make a decision without seeking professional advice too as you’ll be keeping yourself better covered this way.