Have you heard the term remortgage or remortgaging but not sure what it means? You might be coming to the end of your current mortgage deal for your first home or maybe you’re uncertain how it all works. Whatever the reason, it’s a good idea to do some research or seek advice from a mortgage expert.
Here is a simple guide about what it means to remortgage, when to remortgage and why you might consider remortgaging your property to get you started.
What does remortgage mean?
To remortgage is when homeowners change their current mortgage deal or need to take out a larger loan to release more money from the equity in their home.
The new lender pays off your old mortgage and you will then begin to make monthly payments to the new lender as agreed in your new deal.
A homeowner may want to release the equity in their home for a larger sum than the original mortgage. For example, if you want to make significant home improvements.
When to remortgage?
A good time to remortgage is often when your current fixed term mortgage deal has ended. If you’re still in the fixed term deal you can still remortgage before this date, however, it’s usually better to wait as you will likely have to face hefty charges.
When interest rates are low it’s a good time to shop around for a new deal, especially if your current deal was found when rates were higher.
Remortgaging can reduce your mortgage term and even save you thousands in interest.
Once your introductory rate is over, you will be paying a higher interest rate on your mortgage. Remortgaging could save you thousands over the mortgage term.
If you’re in a new position where you can make larger monthly repayments such as an inheritance or a significant income change you could save money in charges and exit fees. It will also mean you can pay off your mortgage sooner.
It’s important to consider your circumstances and your future plans, as well as factoring in additional costs, such as arrangement fees. When deciding whether or not to remortgage, think about if the benefits outweigh the costs.
How to get started with remortgaging
If you’ve done the research and decided that remortgaging your home could be a good option for you but you’re unsure how to do it, seeking mortgage advice is a great place to begin.
A mortgage adviser can help you through the entire process and tailor advice to suit your circumstances. They have access to many lenders and keep up to date with the latest changes in the mortgage market. Get in touch with your local mortgage expert in Hull by our contact form to find our whether remortgaging is a suitable option for you.