Should I Remortgage?

People often ask us about remortgaging their homes, so we’ve put together a few of the most common questions and answers.

Remortgaging your home can be done for a number of reasons, and can have some great benefits, but should not be done without first speaking to a professional financial advisor.

One main reason that remortgaging is a good idea is to save on your monthly payments. There are plenty of remortgaging deals around for you to look at, however, there are still some things to bear in mind; occasionally your existing lender may make you pay a fine for remortgaging, or interest rates may have risen, meaning your repayments will increase.

This is a fantastic way to enter the buy to let market especially people with a lot of equity gathered in their home. This is cheaper than taking out a separate mortgage due to interest rates. Something to bear in mind is that there will be times when the property is empty and you don’t have any rent coming in so you must have a contingency fund to meet your mortgage payments when this happens.

This all comes down to how much equity you have in your current home. You need to be sure you can afford the higher payments, with clear evidence to the lender you’re dealing with. Be aware that if you fail to pay the mortgage, you could lose your main home as well as the second one.

Lenders will be very keen to know why. Big improvements like extensions could perhaps be a cost-effective way of doing it, whilst adding value to your current property. A personal loan could be a better way to achieve home improvements, as your home won’t be at risk if any payments are missed.

This is something you need to think really carefully about as it could work both for and against you. It’s only worthwhile if you feel that you can afford the possibly increased repayments, and if you are certain that you are not at risk of getting into debt again. If you slip into debt after remortgaging, you will be facing paying off new debts alongside your increased mortgage.

This is a tricky topic and you should always get proper legal advice. You can go down many routes regarding your home when you are facing a divorce, such as selling the house and repaying the mortgage or buying your partner out of the home and becoming the sole owner of the house.

 

Conclusion

If you are thinking about remortgaging your home for any reason, get in touch today for a free chat and we can advise you on the best course of action to take.