Remortgaging to raise capital
If you’ve been paying your mortgage off for a while then you might be at the point where you now own a good proportion of the property.
There may come a time when you want to use the money that is tied up in your home for something else, such as for home improvements. Going through this process is known as releasing equity.
What is the best way to release this equity?
You can cash in some of your property’s value to fund your home improvement, whether this is for an extension, loft conversion, new kitchen etc. by remortgaging your house.
If your current mortgage term has come to an end, then you’ll no doubt be looking to remortgage anyway. If you switch to a lower interest rate, not only will you be saving money by paying a lower monthly repayment, but you’ll also be able to release the money you’ve built up to afford your home improvements.
What do I need to consider?
Remortgaging is rather straightforward for those of you who’ve already come to the end of your mortgage term and fallen onto an SVR. However, if you’re still on your current mortgage deal, there are a few things to consider before you go ahead and arrange for your remortgage. You might want to consider your exact reasons for wanting to remortgage to make sure that it’s actually worth switching to a new deal. Also, don’t forget to check whether you would have to pay your current lender an early repayment charge before you jump ship.
To make sure that you’re considering all your options, it’s always worth speaking to a mortgage adviser as they can help make sure that you’re making the right decision for you and your circumstances. This will ensure that you don’t find yourself trapped in the situation where you’ve borrowed more than you can afford to pay back.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.