5 Reasons To Remortgage

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When you remortgage (also known as refinancing) your property, it means you are paying off one mortgage and applying for another. Remortgaging can be a great way to straighten out any wayward finances, but it is also something that needs to be considered carefully before you go ahead with it. A mortgage is a significant debt, and it needs to be handled properly. There are also services that you can use like this refinance mortgage calculator at Lowermybills.com to see if your payments on a new refinance loan could be lower than the payments you’re making on the home loan you’ve got. If you’re sure that you can remortgage and deal with the new payments, then here are some of the best reasons to go ahead with your plan.

You Need A New Deal

Every mortgage deal has an expiry date, and if yours is coming to an end, then it could be a good idea to remortgage. You may have initially had a fixed term mortgage, paying the same amount of money each month for the last two, three, or perhaps five years (and in some cases even longer). Or you might have picked a mortgage that was interest only rather than a repayment mortgage. Whatever deal you had, when it comes close to ending, you will need to remortgage if you want to continue to save money.

If you simply allow your lender to place you on a standard mortgage once your current deal runs out, you will probably find that you will be paying more than you were before, and your deal won’t be such a good one.


You’ve Seen Better Rates

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When you remortgage, you don’t have to stay with your current lender. You can search around and find a lender who will offer you the best rates, and apply for a mortgage with them. The new mortgagewill need to be enough to pay off the old one in full so that you don’t end up in the situation of paying two lenders for one property, however.

If you can find and receive a mortgage that has a lower interest rate, you will be paying less per month, or you can paythe same amount as you are currently but have a shorter mortgage term.


You Want Some Extra Money

One reason that many people remortgage their property is to pull some extra money from the equity they have built up in it. If they have been paying their mortgage for manyyears, or if the property market grows (or both in the best cases), then the amount of mortgage that is owed compared to the value of the property will be low. Thismeans that you can potentially borrow more than you need, and use the excess to pay for renovations to your home. If the renovationswill addvalue to your property, then you won’t be out of pocket.

You can also use your remortgage to pay off debts which will help you gain a better credit rating and relieve much of the financial pressure that you might be feeling. The difficulty here is obtaining a new mortgage with bad credit. However, although it’s difficult, it’s definitely possible, and there are specialist lenders you can talk to if you need this option.


You Want To Pay More

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In some cases, if you have come into money or perhaps have a promotion or a new job that pays more, you might choose to paymore off your mortgageand shorten the term considerably. However, not all lenders allow this, and if theydo,they can often charge high fees when you do it. Therefore, if this is something you are very keen to do (and if you can do it, it certainly does make sense to),then you need to look for a better mortgage deal with a lender who will allow over-payments on either a regular or ad-hoc basis.

Once you have found this lender, you can apply for a remortgage with them and have the chance to pay for your homemany months or even years sooner than you otherwise would have done.


Rising Interest Rates

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The economic forecast is never something that is easy to predict as it is constantlychanging, but there will come a time when the news of an interest rate rise comes, andall the information seems to be pointingin that direction. If this is the case and your mortgage is directly linkedto interest rates (rather than being a fixed rate mortgage),then you may want to remortgage sooner rather than later so that you don’t find yourself paying more than you are comfortable doing. Remember, though, that the banks and other lenders will be just as aware as the changes that are coming as you are, and finding good rates might be more difficult.