The Remortgage
To remortgage, to change your mortgage provider without moving home, is so much more than securing a better deal on your mortgage interest rate, although this is very important.
To get the best deal, and the lowest monthly payment it may be in your interests to change lenders.
Reviewing your mortgage on a regular basis is important to make sure that your mortgage is working for you, rather than the other way around. Mortgage decision made when you bought your property do not have to stay the same for the full term of the loan. For example, many people take the maximum available term when they move house to keep their monthly payments low at an expensive time.
Nearly everyone can make overpayments to their mortgage to reduce the number of years left on the loan and to reduce the interest paid but not many people do. Reducing the mortgage term at the point of remortgage, if affordable, is an excellent way to get your mortgage paid off sooner. For example, if you have 33 years remaining on your term now, would a 26 year term be affordable?
House prices have increased greatly since the start of the pandemic meaning people have more equity in their home. This means that you may well have access to the lenders best value rates, but this also offers up options to borrow additional funds.
Home Improvements. If you have been considering improving your home, extending or going into the loft for example then a remortgage is an excellent way to get hold of the cash. Lenders will typically lend up to 85% and sometimes 90% of the existing value of your home, subject to affordability, for you to carry out home improvements.
Debt Consolidation. If you are struggling under the weight of your credit commitments then one of the most effective ways to reduce your monthly payment is to consolidate your debts onto the mortgage, to have one lower monthly payment at a lower interest rate over a longer term. Lenders will typically end up to 85% of the value of your home for this if affordable.
It is important to know that if you consolidate debts onto your mortgage then you are potentially paying interest over a longer period of time which could work out more expensive in the long term. If you do consolidate debts to your mortgage I would recommend that you overpay the mortgage as soon as it is affordable, to reduce the interest paid.
Purchase another property. If you are looking to buy a second property then you can buy that property with a mortgage but you will need a deposit. Raising the funds for this deposit via a remortgage is an excellent way to preserve your cash. Whether it’s a buy to let, a holiday home or an AirBnB investment. Typically you can borrow up to 85% of the value of your home to do this, if affordable.
The Flexible Remortgage. If you have available funds that you would like to use to benefit your mortgage but you do not wish to commit them entirely in case you need the funds in the future, then there are very interesting options open to you with an Offset Mortgage. Use the money that you do have to reduce the interest on the money that you do not and keep access to these funds with no notice.
Haus Advisory offer a free and no obligation to review your remortgage options. Get in touch via our website to get a personalised recommendation, tailored to your needs. We search the whole market to get you the best possible deal.
YOUR HOME IS AT RISK IF YOU DO NOT KEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT
