How To Remortgage
Decisions regarding your finances are never easy, and when something as important as your home is involved this is doubly the case. If you’re thinking about remortgaging your home, the first thing to know is that you really do need to do your homework and prepare yourself as well as possible, this way you’re far more likely to get a good deal.
First, you should take a good look at your current mortgage deal. Make sure you understand whether or not you will face any fees for ending the mortgage early. When you take out a remortgage you are effectively getting a new mortgage on your property, and using this to pay off your current one. Because this means that you are no longer going to be making payments towards your current mortgage, many lenders charge a fee for this, as they tend to lose out in interest payments in the long run.
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There is a wealth of information freely available on the Internet, so use this to get a sense of what the different types of remortgage are that are available. Try to get an idea what you’re looking for in a mortgage deal.
With an understanding of your current situation in mind, consider your reasons for remortgaging.
Many people remortgage to raise funds, for home improvements, debt consolidation or whatever other reason. If you’re looking to release equity from your home or to secure further lending on it for debt consolidation, you should be sure to do your sums and make sure that the new deal is definitely worth it. It should improve your financial situation in the long and short term, so work this out using a remortgage calculator to be sure that it’s not going to leave your finances in a worse state.
A lot of us also remortgage to get a better deal, perhaps with lower rates or a shorter term for paying it off. Again, you should thoroughly compare any potential new deals with your current one before making this change. Remember that any rates may only be for a fixed period and take this into account in your calculations.
If you definitely feel that you want to go ahead and secure a remortgage, you should take the time to shop around. There are many different deals available, and while comparing them can seem like an arduous task, there are lots of tools available online to help you to do this.
As well as comparing remortgage deals, there are calculators that can help you to get a better sense of what the real cost of a mortgage will be, both now and later.
As well as looking around the remortgage market to see what’s on offer, it’s also worth contacting your current lender and seeing what alternatives they can offer you in order to keep your custom. You may find that they’re keener than you’d think to offer you an appealing deal to tempt you to stick with them.
Another option can be a secured loan in certain circumstances.