With interest rates at the lowest level in many years, many homeowners are taking out a remortgage as a way to save on monthly payments. There are a wide variety of lenders who offer remortgages, many of whom have special remortgage departments. If your home has risen in value or you’re currently carrying a mortgage at a higher interest rate it might be worth considering a remortgage.
A remortgage is simply a new loan that replaces an existing mortgage. It can be obtained through your existing lender or you can use a different lender, depending on where you can find the best deal. As part of the remortgage process, your old mortgage will be paid off and you may even have the option to cash out some of your home equity.
There are a number of reasons why you may want a remortgage:
Remember that a remortgage is secured by your home, so it’s important to make the payments on time and in full to maintain the loan in good standing.
In some situations, a remortgage loan might not be a good idea. For example, if it hasn’t been very long since you obtained the mortgage or you got it at a very discounted rate you may face substantial penalties for early repayment. Or, if the balance on your existing loan is very small you may find that lenders are unwilling to underwrite a remortgage or that the fees they charge will be greater than the remortgage savings.
Another reason not to remortgage is if your employment has recently changed, especially if you are newly self-employed. Lenders want to be reasonably sure you’ll be able to repay the remortgage amount and they are often reluctant to lend to people with uncertain future incomes. However, some lenders specialize in these situations so do more investigation about your options.
If you have an adverse credit hstory or been refused credit in the past and you have a mortgage, it is possible to get quotes for bad credit remortgages in the UK via our online form. If you are a homeowner and you are seeking debt consolidation, adverse credit remortgages are normally the cheapest method of consolidating your existing debts into one loan.
A good place to start is usually with your existing lender. They may have special offers or lower rates available for current customers who want to remortgage. You should also check out other lenders, though, because the remortgage marketplace is very competitive and there are lots of great rates available. Once you have selected a lender there are several steps that need to occur:
The cost of remortgaging varies from lender to lender, but in general it will probably cost less than when you first obtained a mortgage. Before deciding on a lender it’s important to find out what the costs will be; many will waive certain fees or charge a substantially reduced rate. Also take into consideration if there is an early repayment penalty on the mortgage you’re replacing, as this will add to the overall cost of the remortgage.
For many homeowners a remortgage is a smart option for lowering monthly costs, consolidating debts, or financing home improvements. The remortgage market is very competitive so research several different lenders to find the best deal for you.