Remortgaging Advice.

When you remortgage, you simply apply for a new loan to pay off your existing mortgage. Consequently, the amount of that new loan should be equivalent to what you’re currently owing.

Additionally, you have the option to remortgage for an amount of money that’s more than you owe. This can happen when you release some equity and free up extra cash to use for other purposes.

As we previously clarified, you can either remortgage with your current lender or sign a new mortgage deal with a completely new lender.

Remortgaging With Your Current Lender

With competitive interest rates, you can always remortgage with your current lender. That’s especially if you’re approaching the end of your fixed-rate period. Even if this isn’t the case, remortgaging with your loan provider may cost you less than switching to a new one.

That’s because your current lender may offer to waive any fees and transfer you to a new deal, in exchange for tying you in for more years.

Unlike what most people think, remortgaging isn’t expensive. Contrarily, in many cases, it can save you a great sum of money. In reality, there are many circumstances where a remortgage can be better for your financial situation.

Here are ten of the most common reasons you should consider remortgaging.

1. You’re Aiming for a Better Deal

With the competitive mortgage market, switching your current deal with a better one can save you lots. Even if it involves paying an exit fee or an early repayment charge, remortgaging can still be worth it.

While your current provider may request extra charges, the amount of money you’re saving with a better remortgage rate can be much more. That’s especially if your outstanding loan is somewhat large.

So, before you consider switching mortgages, you might want to weigh the savings of a new deal versus the cost of exiting the current one. When the Bank Says No will ensure that you get this decision right.

2. Your Initial Mortgage Deal Is Ending

Whether a fixed-rate, a tracker, or a discount mortgage, the initial mortgage deal is the first period of a long-term mortgage where you pay a fixed rate. This period usually ranges between two to five years long.

However, after this deal comes to an end, the interest rate automatically changes according to your lender’s Standard Variable Rate (SVR). This rate is much higher than what you’re currently paying, and, over time, it can cost you thousands.

So, if you’re considering remortgaging for that reason, you should ideally start looking for a new deal at least three months before the current mortgage deal ends.

3. You Want To Borrow Money for Any Reason

There are instances where you’d want extra cash to pay for many things. However, if your current lender refuses to give you the money, such as through a personal loan, you can always choose to remortgage.

Having said that, you may need to provide your new lender with proof of why you want the extra money. This could include the following.

• Paying off other existing debts
• Home improvements
• Deposit on another property
• Going on a holiday
• Buying a new car
• Funding a business start-up

4. You Own More Equity Now

The longer you have been regularly making your mortgage payments, the more equity you are likely to have in the property you own. Therefore, it can be a better option to consider remortgaging what’s left on a lower loan-to-value (LTV) interest ratio as this will usually mean lower monthly repayments.

5. You Want to Release Some Equity

You may consider equity release, especially when your fixed-term mortgage deal is ending. Remortgaging on what’s left of the property can help you start a new business or even buy a new home.

Nevertheless, you should consider how you’re going to use the money, and you need to have a backup plan in case your investment wasn’t successful. Otherwise, you end up with more mortgages to pay.

6. You Need To Consolidate Your Debt

If you have more than one debt, whether from a loan or credit card payments, remortgaging can help you with that. When you pay off all your debts and remortgage for a much more reasonable monthly payment.

Having said that, you need expert advice, which When the Bank Says No can provide, as there could be some downsides to debt consolidation, including:

• Your current lender may consider this deal not worth the risk after seeing your financial mismanagement
• Elongating the debt period can cause you to end up paying more interest in the long run
• You may adopt this as a habit which results in further debts

7. You Worry About the Increase of Interest Rates

If you’re concerned about the interest rates the Bank of England sets, you may want to review your current mortgage. That’s to avoid any future increase that can cause you to pay more over the lifetime of your mortgage.

8. You Separated From Your Partner

If you’re having a breakup or divorce, then you would need to separate your finances from your ex-partner’s. That’s especially if you both have co-signed the current mortgage. In this case, there are a few options to work this out.

• You can sell the property, pay off the debt, and split the profit with your ex-partner
• You can buy your ex-partner out and pay the mortgage yourself (if you can afford it)
• You can remortgage to raise money, pay your ex-partner out, and get a new mortgage deal, which is hopefully more affordable

9. You Experienced a Change in Circumstances

Your old mortgage deal may have restricted the range of options available at the time. If you experience a change in circumstances, income increase for example, this might qualify you for a mortgage deal with a much lower interest rate.

10. Your Property’s Value Has Increased Significantly

Your property’s value may have increased since the time you first signed your current mortgage. In this case, you may have become eligible for lower interest rates. That’s why remortgaging can be a great option to think about.

Other strategies could be getting a credit card and spending and clearing the balance each month. This demonstrates to lenders that you are proficient when it comes to managing your money. You should also keep your bank account address up to date to improve your overall profile and update your address and contact information with your credit reference provider.