Homeowners Could Learn More About Remortgaging and Save Lots of Money

Homeowners Could Learn More About Remortgaging and Save Lots of Money

According to a recent report, almost half of all homeowners have never remortgaged their homes. Barclays also reported that those homeowners could be saving a substantial amount of money due to the low interest rate remortgages now available. The reason behind the lack of action to remortgage and save is due to being confused by remortgaging terms and exactly what a remortgage does for a homeowner.

The report revealed that the most confusing terms were LTV and SVR. The LTV stands for loan to value and helps determine what remortgage offers are available to the homeowner. It is the comparison of the value of the intended loan to the value of the home. The higher the value of the home in comparison to the value of the loan usually offers the best interest rates. It also can determine if a homeowner qualifies for a remortgage or not with a particular lender or broker.

The SVR is the standard variable rate. This is the interest rate the lender will move the homeowner to if they choose not to remortgage. The rate is variable meaning it could fluctuate either up or down. This could be a difficult situation for a household on a tight budget. Allowing a mortgage to be moved to a SVR versus remortgaging could have the homeowner paying out more money than necessary. According to experts, the interest rate on a SVR could be more than double of what could be found on a remortgage.

Homeowners can also be confused about what exactly an interest rate does for the borrower. The interest rate is the cost of borrowing. In simple terms, the lower the interest rate the less the borrower will pay for the loan. 

Learning more about remortgaging could easily be done online. Many remortgage brokers and lenders have educational information to help homeowners learn more about remortgages and the opportunities available. In fact, many of those websites will offer quick quotes that will enable borrowers to discover the best low interest rate remortgages available. 

With interest rate deals at historically low levels and at rates lower than what most would have mortgaged with two or more years ago there are savings to be found.

Other top things to learn about remortgages are that most homeowners are currently choosing fixed interest rate remortgages. The fixed rate locks in a low interest rate throughout the term of the remortgage deal. It means there will be no change in the interest rate even if the Bank of England raises the standard base rate. Choosing a fixed rate deal helps build a safety net against rising rates and having to pay more when rates increase.

Another benefit to remortgaging is that homeowners could turn their built up equity into cash. The value of most homes in the UK has risen during the pandemic. The value of the home that is greater than the loan value could be turned into cash for the homeowner with a remortgage. The cash could be used for anything the homeowner desires and most are using theirs to upgrade and improve their homes.

Remortgaging could be a smart financial strategy for homeowners. Seeking more information to understand the benefits and opportunities could be done in minutes online or by asking questions of a remortgage expert. A small amount of time learning and obtaining quotes is an easy and simple step to start in the process to remortgaging and saving perhaps a lot of money as well as gaining peace of mind in the warnings of rising rates due to begin next year.

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