Reasons For Remortgaging
Aside from the basic money savings that a remortgage can offer, there are other reasons to consider moving your mortgage loan. The reasons for remortgaging might include:
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Get a Quote »- Get a Better Rate – In an economic climate where rates are at an all-time low, this is definitely one of the top reasons for remortgaging today. A lower interest rate does more than reduce your monthly payment; it also allows you to put more money toward your principal balance and pay less to the bank. This increases equity in your home more quickly, which opens the door to a host of additional financial opportunities.
- Reduce Debt Outgoings – A remortgage can also help you reduce other debt you have accumulated in two different ways. First, a lower monthly payment frees up more cash that you can apply to other obligations. You can pay off your car or credit cards much more quickly by simply increasing the amount you pay on those obligations each month. The other way to use a remortgage to reduce debt outgoings is to take additional cash from the equity in your home and apply it to your new mortgage balance. You can use the residual cash to pay off credit cards and other personal loans, and the increased mortgage balance is paid at a much lower rate than other loans typically offer.
- Release Equity – If you have lived in your home for some time, the equity you have built up can become a valuable asset. By remortgaging, you can release some of that equity to take a holiday, continue your education or make improvements to your existing home. The additional amount is added to your current mortgage and paid off in affordable monthly instalments at a rate much lower than you would pay on a standard personal loan or credit card.
- Switch Products – Another reason to consider a remortgage is to find a mortgage product that is a better fit for your current financial situation. Perhaps your income level is higher than it was when you first opened your mortgage. You are not able to make additional payments on your current loan without an overpayment penalty, so you want to remortgage to get a product that allows you to pay off your property faster. If your current mortgage is no longer meeting your financial needs, it may be time to shop around for a product that will work better for your budget.
- Current Product Expiration – Many mortgage loans offer a specific rate or terms that are only valid for a set period of time. At the end of that period, your mortgage may automatically convert to a product that is less attractive. This may be a time to shop around for other mortgage options to see if you can get a better deal.