There are good and bad reasons to consider remortgaging your property. For instance, you would probably want to rethink your decision if your remaining mortgage debt is less than £50,000. In this instance, you will find it challenging to make a saving. You should also steer clear if the penalty fee for early repayment is quite sizeable. This could negate any savings that you may be able to make by finding a new deal with another insurance provider.
There are, however, a number of reasons why re-mortgaging your property would be a good idea. Some of these reasons are highlighted below.
The term of your current mortgage is ending
There are many types of mortgages out there, such as discount mortgages, that only last for a few years. Once the term comes to an end, you may be put on a standard variable rate, ultimately increasing your monthly premiums. This is why it is a much better idea to go in search of a remortgage deal. Experts recommend doing so no less than three months before your current mortgage term is set to expire.
You want to save money
It is important to do your maths before making a decision; however, it can often be a better choice to remortgage for a better rate despite the associated early repayment charges and exit fees. Just be sure before you make the leap!
You want to borrow more money
If you have asked your current mortgage provider to quote you on borrowing more money and they are unwilling to do so or have offered you an unattractive deal, you may want to consider remortgaging your property instead. Make sure that it is the best possible option available to you in terms of borrowing more money and ensure that the purpose for which you intend to use the money is deemed acceptable by your new mortgage provider. Most will not allow you to use it for any reason other than to conduct home improvements or to pay off existing debt. It would be highly unlikely for a remortgaging provider to allow you to use the money to start a new business, for instance.
Your home has increased in value
Once again, you will need to do the maths in order to find out how much of a difference this increase in value can make in terms of your mortgage repayments. Remortgaging may be worth it if you find that you now fall into a lower loan-to-value band. An experienced conveyancer will often be able to advise and guide you in terms of the remortgaging process. So be sure to seek out a remortgage conveyancing quote if you are keen for assistance.
Ultimately, it is always important to evaluate just how much a remortgage deal could help you to save in the long run compared to how much you may need to fork over in the short term (in the form of early payment charges and exit fees). If it seems as though the long-term savings outweigh the short-term costs, go for it and make the most of the opportunity. It will be worth the extra effort.
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