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Remortgaging might be the right path for you, especially if you are looking to cut your monthly repayments, pay off other debts, or reduce the term of your mortgage. Let’s take a look at what lies ahead for you if are thinking about changing up your mortgage lender. Remortgaging a property is never a decision to be taken lightly. Sure, it can have a host of benefits, including provision of access to cheap capital, but it doesn’t help to forget the risks. It is, after all, the process of changing one lender for another. And the grass will always look greener when you feel that your current mortgage isn’t suiting your interests or lifestyle. Why do people undertake remortgages? Well, there are three reasons in particular, including cutting monthly repayments, paying off other debts, or reducing the term of your mortgage (especially when your current lender imposes harsh penalties for over payments). Choosing the right time to remortgage requires the careful weighing of both pros and cons. Some say that this is the golden age of the remortgage - if you’re going to do it, do it now. With low mortgage rates still very much ‘in vogue’ due to global economic insecurity, combined with historically low interest rates, it’s still possible to lock in a cheap deal and sit on it for the years to come. This is especially true given the uncertain impact of Brexit, and how it could affect the housing market. However, now could also be a rather difficult time to find a willing lender if you aren’t endowed with a glowing credit history. Due to the ever-lasting aftermath of the Global Financial Crisis in 2008, banks and other mortgage providers are charged with being more selective and finicky about the deals they offer, and to whom. Before engaging on a remortgaging, it’s best to check your current deal thoroughly. Are you now on a Standard Variable Rate (SVR)? Will penalties be incurred if you change mortgage? How high will those be, and what interest will you pay on them? These are all important to know before making any big decisions. Also take into consideration - and this is important - how much of your mortgage you actually have left. Since the turn of the century, typical lenders have pumped up fees to help them artificially lower mortgage rates. Switching can now easily incur fees of up to £1,000, meaning that small debts can actually lose more on the overall change. The whole process takes around a month, too, so don’t expect a quick fix. Your new lender will send an agreement based on details provided by you, before commissioning a surveyor to check that they can accept your property as security for your new mortgage. Make sure you pick a time of year when it is convenient for you, as completing the whole rigmarole is not without its efforts. In reality, personal circumstances will play a large part in dictating whether you should, or shouldn’t remortgage your house. Finding yourself in a weaker financial position than you were when you took out your first mortgage is clearly not a good time to be switching up loan providers. Remortgaging a property is a big undertaking that needs to be done carefully and thoughtfully. Don’t just do it on a whim, or because you feel like it. If done in the right way, at the right time, remortgaging your home, or any other property, can be a great way of saving thousands of pounds each year by reducing the amount you pay on interest. If you are unsure about what to expect, or how to proceed with the task at hand, don’t forget to seek out advice first. That way, you can offset any unpleasant surprises from becoming nasty shocks further down the line - such as finding out you would have paid less overall by sticking to your original deal. Track your mortgage online with MortgageWatcher.com
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