UK Remortgage
To remortgage is to quit simply switch your mortgage scheme, often
to a new lender, but not in all cases. In an attempt to coax borrowers
away from other lenders, mortgage
brokers will offer discounted interest rates wrapped in to introductory
offers. Figures show that in recent years the remortgaging market
has boomed, as increasing numbers of people have become aware of
the advantages of moving their home loan to a new lender, knocking
thousands of in interest over the life of the loan.
Why remortgage?
There are three main reasons to remortgage: to release equity you
have built up in the property; to fix your rate; or to cut your
monthly out goings by reducing your mortgage repayments.
The first reason to remortgage would be simply to release value
that has built up in your property, perhaps as a result of rising
house prices. In this instance you would take a new mortgage for
the value of the property, not just the amount you owe your existing
mortgage lender. This can be a good option for people who want to
obtain a large amount of cash with interest charged at the mortgage
rate.
Another reason to remortgage is to fix the rate you are paying
on your loan (see fixed rate mortgage).
While interest rates may still fall, it is more likely they will
stay where they are and they may even begin to rise.
The third reason to remortgage is if your special offer period
has ended and you are now paying a lender's standard variable rate
(SVR) you could probably get a lower mortgage rate elsewhere. In
fact, you have probably even seen your mortgage lender offering
a better rate to new clients. By moving to a lower rate you will
cut your monthly mortgage repayments.
.
How to go about remortgaging
If any of these reasons make sense to you the next step is to work
out the cost to remortgage - and whether then it is still worth
your while. Look over your current deal to find out if there are
any redemption penalties. Also find out from your mortgage broker
if you are in a negative equity position. In the unlikely event
that you are, you should think twice about moving your loan because
you will have to find this money before you can move.
The next thing to bear in mind is the cost of the new mortgage:
alongside a possible arrangement fee for the loan, there may be
legal fees to meet, the price of a new valuation and the cost of
local authority searches. It all depends on your mortgage lender.
You may choose a deal without an arrangement fee, which will save
you money. If you have had a valuation done recently the new mortgage
lender may be willing to accept its findings. Or you may find a
lender willing to pick up the tab for the conveyancing and the survey.
If you cannot find the information you are looking for here try
Re-mortgages, they are
one of the leading sites for re-mortgaging that we know of.
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