If you are thinking about remortgaging your property, then you must already have a current mortgage. First off, it is important that you are clear on the fact that a remortgage is not a second mortgage on your property. A remortgage in effect is the transfer of a mortgage from one lender to another.
Essentially, you pay off your original mortgage with your original lender with the proceeds of the new one. You might not already know this, but remortgaging can have a number of benefits and advantages. Here are some of the reasons why you should remortgage your property, and what you have to gain from it.
Your Property Value Increased
How much you get out of your mortgage is paired with a rate in accordance with the value of your property. This is called the loan-to-value band. If your property is located in an area that has witnessed recent infrastructure development, favorable economic factors, or a rise in demand on real estate, then you can guarantee that the value of your property has increased. This would make you eligible for a lower loan-to-value band. If your deal with your current lender is flexible, you might be able to negotiate these terms, but you might as well have a look since you are looking at new terms for a mortgage.
Benefit from a Better Rate
Getting a better rate does not necessarily mean that your property value needs to go up. There are multiple lenders who will gladly offer you better rates for your mortgage, which is another reason why you might opt to remortgage your property. While exiting your initial deal will most likely stipulate some extra fees and charges, that is not to say that you should not have a look. The folks from ExpertMortgageAdvisor.co.uk discuss how there are a lot of great deals available from mortgage lenders, although you should make sure that it would be a remortgage. Do the math, and you might find something worth the take. Depending on the type of mortgage you have, you may also need to consider predictions of interest rates going up. If you have an adjustable-rate mortgage and are worried about what the future holds, then remortgaging might be your best option for a fixed-rate mortgage, which for you could mean a safer and more secure future.
Borrow More Money
Taking out a second mortgage on your house might not always be a great option for a lot of people. Taking out a second mortgage means making an even bigger commitment, which might not be justified, particularly if you are looking to borrow just a little bit more money. In such cases, it would be wise to start negotiations with your current lender. However, if their offering is not as kind as you would have hoped, or the terms of your deal do not allow it, then opting to remortgage might just solve your problem. A new lender might be more flexible with their terms. Although you will need a solid reason to justify your extra loan, such as for home improvements or to buy a new car, you can easily secure a remortgage that suits your needs.
Change the Current Deal
Remortgaging as a whole gives you the opportunity to change the terms of your mortgage with a new lender, particularly if your initial lender is not very flexible with changing the terms of the deal. If for one reason or another, your financial circumstances now allow you to pay more off your mortgage, and your current lender will not budge, then there is a lot you can benefit from a remortgage. For one, you will be able to pay your mortgage off quicker, meaning you can be mortgage-free sooner.
For another, a reduced loan size will also mean that you can get a cheaper rate, leading to even bigger savings. Another reason why you might be unhappy with your current deal is that you want to change it from interest-only to capital repayment. Although most lenders should be happy to make the change, if you are unlucky and find yourself stuck with a lender who does not want to do that, then a remortgage can be the solution to your problem.
Managing your finances throughout the course of your life can be a tricky task. If you currently have a mortgage, then it is definitely worth having a look around. If you remortgage, you could possibly benefit from cheaper rates, a reduced loan size, and more flexible terms, all of which can save you a lot of money on the long haul. But make sure you do all your calculations and think about it well before you make the jump.
- How To Manage Your Mortgage Payments
- Pros and Cons of Financing a Business
- How to Become a Freelance Mortgage Broker
- How to Raise Money to Finance a Franchise
- Benefits Of Getting Online Installment Loans For Bad Credit
a WordPress rating system
a WordPress rating system