Use Your Brain When Using A Remortgage
Here are some tips for helping you to decide if a remortgage is the right move for you:
What is remortgaging? – A remortgage is replacing your current mortgage with a new loan, either with your same lender or through a new company. It’s usually done for reducing monthly payments or for releasing home equity. Remortgaging usually goes through a broker.
Lower Payments – One of the main reasons for anyone to remortgage is for lowering their monthly payments. If you are at a point where you’re really struggling to make your payments, then it’s a way to get yourself a better deal. If you manage to find yourself one, then approach your current mortgage holder to ask if they are able to match it. Most of them would rather keep you at lower rates than lose totally lose you. If they can’t match it, look hard at the remortgaging loan and see about a better rate.
Remortgaging For Releasing Equity – This is another reason for remortgaging. It helps you get your hands on some extra cash by freeing up some of the equity built up in your property. What that means is that you’ll be borrowing more than what your current mortgage is in order to release what money you’ve already paid on the property. This can be very helpful if you have property that has gone up in value, or if you’ve paid a large part of your mortgage off. It’s like getting a loan, only the rates are lower because they’re part of a remortgage.
Pitfalls – One particular thing to watch for when remortgaging is making sure it’s the right move for you. There are some costs involved, like legal fees and penalties for changing your mortgage. Those fees can really add up, and it could be beyond what you can afford. But if you borrow extra money, or lower your monthly payments, you’ll probable be repaying it over a longer time period. This can seem very helpful now, but can cost you down the road. It’s a long-term deal.
Benefits – The major advantage for obtaining a remortgage is reducing those monthly payment. It can be a big help for gaining a little financial stability and security, because it can stop the struggling you’ve been going through make your payments. The money you get through remortgaging can be used for making home improvements of for clearing up other debts.
Remortgaging is helpful for getting you out of the struggle of your current monthly payments and for freeing up some equity. But it’s something you really need to take a hard look at first. Make sure it’s what you really want to do at this time. When you do it at the right time, a remortgage can be a good thing.