Info: Whether you are moving lenders or staying with the same lender but taking a different mortgage deal, it is still classed as remortgaging.
The reasons people choose to remortgage:
To raise money
If your income has increased since taking out your mortgage or the value of your home has increased, then you will be able to increase your mortgage. You can then use this money to…
Make home improvements
This could increase the value of your property over the long term and be a smart investment in your property’s future, as well as make your current standard of living in your property more comfortable.
If you have several debts and are struggling to pay them off you can use remortgaging to clear those debts, mortgage interest rates are usually far cheaper than credit cards and so this is an option people often consider. However, this decision must be thought about carefully as if you fail to meet your increased monthly repayments, then you will be at risk of losing your home. We recommend you discuss this option carefully with a debt advisor or one of our mortgage advisors before proceeding.
If the value of your home has risen then you may be able to get some of its equity released to spend on whatever you see fit, whether its university fees, a new car or even a holiday. You should be aware though that the value of your mortgage loan will increase, but the value of your property will not.
Remortgaging can be of benefit to you if you wish to remortgage for any of the above reasons, or your existing mortgage is no longer right for your circumstances and you require a better deal.
Here we will provide a quick explanation of the benefits and risks involved with remortgaging.
- You can fund home improvements
- You can make savings with lower interest rates
- You could find a more suitable mortgage deal
- You can release equity built up in your home
- With a bad credit history you will have fewer remortgaging options available
- You may end up subject to early repayment charges if you are still within the special deal period
- If you use your home as security and can’t keep up the monthly repayments you risk losing your home.
- You could end up increasing the overall cost of your mortgage if you lengthen the mortgage term.
- If the time ever came when you had to claim benefits to aid in paying your mortgage, you wouldn’t receive any money for non-housing related costs you took the loan out for e.g. a holiday
The rate that you could be offered on a Remortgage deal will depend on a variety of factors including:
- How much of the property you own outright
- Your income
- The amount you would like to borrow
- The value of the property and whether it has increased in value since you first took out your mortgage
When is a good time to remortgage?
It’s always a good time to think about remortgaging when your current deal is coming to an end and your monthly repayments are set to rise. To get ahead you should start looking for new deals ideally before your mortgage deal comes to an end, so the transition between is as smooth as possible.
How long does remortgaging take?
Remortgaging usually takes about a month but this can vary depending on individual circumstances, you will know when you have completed as you will receive a completion statement from your lender after the valuation and various administrative work has been completed.
With so many risks it’s obvious that you need to approach the subject of remortgaging with your eyes open and have all the facts available.
That’s why we offer comprehensive and candid advice when it comes to remortgaging, our advisors can provide you with all the information you need to make an informed decision on whether remortgaging is right for your circumstances, then offer you some of the most competitive and affordable remortgaging deals in the market.
For further details on remortgaging please see our additional guides or contact one of our advisors.
Your home may be repossessed if you do not keep up repayments on your mortgage.