A remortgage is the term used when you raise a secured loan (a mortgage) on a property that either is currently free of mortgage or has an existing mortgage and you switch to another lender.
There are a variety of reasons why you might be considering a remortgage. Perhaps your existing mortgage terms are no longer competitive? Maybe you want to pay of a part of your mortgage with a bonus but your existing mortgagee won’t let you? You might have no mortgage at all but you want to borrow cash from your asset by raising a mortgage, perhaps to pay for a new roof or to pay for a big and unexpected bill!
There are some basic things to bear in mind:
- Will paying off your existing mortgage mean you incur penalty fees?
- What costs will be involved in raising a new mortgage?
- How much can you borrow and for how long?
You should also be considering whether borrowing more on a mortgage is your best route. Sometimes, a short term loan at a higher rate might still be cheaper than buying because of the longer repayment period.
In the first instance, there are some basic things you can do to put yourself in a strong position when applying for a loan. Check your credit status and make sure you’re on the electoral role. Make any budget savings you can before you apply. Illustrating that you are living well within your means will help you when negotiating a new mortgage offer.
Your mortgage options will be governed by the value of your property, the size of your mortgage and your ability to repay it through income.
In most cases the larger your mortgage the more money you might be able to save by shopping around. Of course, the key to a great deal is knowing what’s available! That’s where we come in.
For more information about remortgaging contact and advisor today on 01628 507477.
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