Paying too much for your home? A house remortgage could save you money
You will need a remortgage if you want to find a better mortgage deal while retaining your existing house. Remortgage products are available from banks, building societies and online, so there is no shortage of choice.
In the last 10 years there has been a dramatic rise in the value of property in Britain. Because of this, your house is probably worth much more than it was when you first took out your mortgage.Many homeowners are now looking to release some of that equity in their home by getting a re mortgage. The money you free up with the remortgage could be used to invest in more property, to extend your own home, or to treat yourself to a holiday or new car.
However, releasing the equity in your home is not the only benefit of getting a new mortgage for your house. A remortgage can also save you a significant amount of money on your monthly repayments.
Banks and building societies are always looking for new customers. So if you are changing your mortgage to a new lender, you are likely to be offered a much better deal than you are already on. Many people are knocking as much as two per cent off the interest rate they pay by switching lender. Alternatively, you could use the better deals elsewhere as a bargaining chip to get your existing lender to offer you a more competitive interest rate.
Getting a better deal with your existing mortgage provider will save you time and money. However, this is not always possible so if you remortgage with another lender you can expect some extra expenses.
Most commonly, these include redemption fees if you are already locked into a fixed rate mortgage, exit fees and set up fees. You may also have to pay some legal fees and revaluation fees when you remortgage.
You can shop around yourself for a remortgage or get a remortgage broker to do the job for you. A good remortgage broker that deals with a number of lenders should be able to find you a good deal on a loan for your house.
A remortgage broker should assess your personal circumstances, your income and your credit history and try to find you the best deal.
However, before you start looking you should decide on which kind of remortgage suits you. The most common remortgage products on offer are variable interest rate remortgages, fixed remortgages, capped rate remortgages and tracker remortgages.
When you look at any remortgage product be sure to calculate exactly how much interest you will pay over the full term. Some products offer lower introductory rates that can be deceiving as the rate could rise after the first year.
So whether you want to save money or release the equity that has built up in the value of your house, a remortgage can be a great way to improve your finances. In general, the same rules apply to remortgages as with any loans. Remortgage products will vary from lender to lender and it is vitally important that you do not overstretch and miss repayments.
