Should You Consider Remortgaging Your Home?
Sep 14, 2018
You’ve saved up for a deposit. You’ve worked hard to purchase your home. You’ve dealt with the additional costs and now you’ve settled into your home and have been living it for some time, proud that you’ve managed to get on the property ladder. But, if you are a homeowner, have you ever thought about remortgaging your property? If not, then it's definitely something to consider. Below, you will find some of the most common questions that homeowners ask themselves when considering remortgaging:
What Does it Mean to Remortgage Your Home?
While the process might seem intimidating at first, we are here to help simplify the process. Remortgaging your home is the process of switching your existing mortgaging to a new deal with your current lender or a different mortgage provider. Remortgaging your home doesn't mean taking out a second mortgage or moving home because the new mortgage deal is secured against the same property.
Deciding to remortgage the property is something that some people choose to do for a variety of reasons. However, most commonly, people who decide to remortgage their homes do so to reduce the monthly mortgage payment amounts.
What are the Pros of Remortgaging Your Home?
Remortgaging your home is a good option for you if you want to reduce the monthly mortgage payment amounts. By doing this, you can have some extra money to put towards other expenses such as bills, a new car, or even a dream holiday! In addition to this, one of the biggest reasons for remortgaging your home is to deal with the interest rate. Remortgaging your home can help reduce the interest rate on your mortgage and it's a way to fix your monthly payments and protect against possible raise rates in the future.
If you're in the process of reevaluating your expenditure and you need to conduct your finances carefully, then remortgaging your home is a way to consolidate your debts and make them much more manageable. For some people, remortgaging their property means releasing equity from the home in order to raise a cash lump sum. This might be something to think about if you need to raise money for important matters - such as needing to raise money to start a business or invest in a second home. When it comes to property, any homeowner will know that making home improvements are costly, so remortgaging your home is a great way to raise money for this.
What are the Cons of Remortgaging Your Home?
If you are considering remortgaging your home, it's important to have a long think before finally making the decision. Before sending off a remortgage application, ask yourself these two questions:
- Will I be able to fully make the payments under the new deal?
- Will remortgaging be beneficial to my current financial situation?
If you have answered 'no' to either of these questions, then think again. You don't want to put yourself in a difficult position. If you are not able to keep up the payments then your home could be repossessed.
Remortgaging your home comes with its fair share of downsides. It means that you'll end up stretching your debts to a longer time frame and this increases the overall cost in the long-term. Plus, the remortgaging process can take time and you will have to pay a fee. Overall, if the benefits outweigh the downsides and you are able to keep up the payments and manage your finances effectively, then remortgaging your home could be a viable option for you.