Everything You Need To Know About A Remortgage
James Copper
When looking to remortgage your aim is to switch to a deal that is more
beneficial to you and saves you money/increases flexibility etc,
whether this be sticking with your present lender or changing to
another.
What Are The Benefits Of Remortgaging?
Remortgaging is a chance to switch from an inadequate mortgage and take
full advantage of current products available such as fixed rate,
tracker or discount mortgages which can offer you more competitive
rates. Choosing the right deal for you is just as important when
remortgaging as it was the very first time. Consideration should be
given on your prediction of future interest rates, your own risk
assessment, your income and the balance of the loan outstanding. You
will also need to weigh up your monetary needs and present
circumstance.
Adverse Credit Remortgages also enable you to cut loose from a
dissatisfactory lender as there is nothing to say you should stay with
the same one.
Doing either of these things when remortgaging may considerably reduce
your monthly out goings. This is just one benefit of deciding to
remortgage.
Say for example you have a loan of 100,000 and are paying a rate of
7.5% interest; you then switch to another lender which has a rate of
just 7% interest. This would mean you would be saving 31 each month,
thats nearly 400 per annum.
Sometimes the money tided up in the house could be put to better use
else where. For an amount larger than what is needed to repay your
original mortgage, remortgaging can release some of this equity to put
towards investing in a new business venture or maybe even another
property.
How Long Will The Process Take?
The process of remortgaging tends to be faster than that of a normal
mortgage (but slower than adverse credit loans) as in this case youre
not buying a property. The whole process without considering individual
circumstances should take on average six weeks.
The Cost Of A Remortgage
As with your original mortgage, a survey to confirm the value of your
property will need to be done as the first one will no longer be valid.
Add onto this solicitors fees and administrative costs, however these
will be lower than mortgaging for the first time and depending on your
lender, they may be able to recommend certain people in association
with them that could lower your costs.
There maybe early repayment charges on your existing mortgage. This is
when there is a penalty if you redeem the mortgage within a fixed
period of time after commencing. For example this could be additional
pay of three to six months or a percentage of the loan amount.
When looking at the cost of a remortgage you also have to look at the
possible longer term benefits of the process and the money you could
save.
Quick Action Plan
If still indecisive on whether remortgaging could work for you, run
through the following points:
First of all communicate with your existing lender and ask for a
redemption statement. This indicates what, if any penalties you will be
charged in the event of remortgaging, it also states the amount still
left to pay on your current mortgage.
When looking at a remortgage deal be sure to look at all the small
print and ask for the lender to show you clearly what your potential
repayments would be. It is always useful to ask for something in
writing to use as a reference.
Add up all costs payable with any new lender i.e. the arrangement and
administrative fees. Legal fees should also be added on, these will
vary depending on where you go and the value of your property.
Armed with these facts and figures you should then weigh up whether
remortgaging will benefit you, whether the long term savings will
outweigh the immediate costs of remortgaging.
James Copper enjoys writing on all aspects of finance. He works as a
Mortgage Broker for
http://www.any-loans.co.uk
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