10 Reasons For Remortgaging Your Home

08 Mar 2017

1. You can get a lower rate

One in five mortgage borrowers pays over the odds by staying on a investor’s Standard Variable Rate (SVR). This is usually around 2% higher than the most competitive new deals available on the market. If your monthly repayment was $1,596.10 or £1000 on a SVR of 7.5%, you could save almost £170 a month by remortgaging to a more competitive 5.5% deal.

2. You can choose a more secure deal

If you are on a variable rate and interest rates increase, you might want to consider remortgaging to a fixed rate. This anchors your monthly payments down at a set level, so you can rest assured you will not pay more when interest rates increase.

3. You will be able to make home enhancements

Extending a house, renovating a kitchen or bathroom or carrying out a loft conversion can add around $31,896 or £20,000 to the value of a property. Many mortgage investors offer special rates to homeowners who want to remortgage to make home enhancements, and some allow you to borrow more money than usual for this purpose. For a lot of us, we buy a home in any condition and need to make repairs at some stage. If you are looking to improve the energy proficiency of your home, look out for mortgage investors offering special discounted rates for people with this specific idea in mind.

4. You can find a malleable mortgage

Flexible features, such as the ability to pay only a little amount of money at a time, overpay and take payment breaks, can be very useful A flexible agreement means you can pay your mortgage off in a manner that best suits your lifestyle. For example, if your income has gone up and you want to pay off your mortgage early or you are taking a career break to look after your children.

5. You can combine your debts

If you have a lot of credit card and loan debt, you could reduce your monthly payments by combining your debts into your mortgage. This is because the interest rate on a mortgage is often around 10% lower that the interest rate on a credit card. Warning, adding these debts to your mortgage may also cost you more over the longer term.

6. You can get money to buy a rental property

If you believe there is a profit to be made in property investment You could increase the size of your current mortgage and use the extra cash to put down a deposit on a buy to let venture. Don’t forget, becoming a landlord is a complex process and there are risks involved.

7. You will help your kids onto the property ladder

House prices in many parts of the United Kingdom and the United States have trebled over the past 10 years. This leaves many young buyers today struggling to purchase their first home. You can liquidate some of your equity from your home and help your family financially by remortgaging.

8. You can raise some money

You may want some cash to finance an expensive purchase. Remember that with a mortgage you are putting your home at risk if you fail to meet the payments, so don’t overdo yourself.

9. You can get a better service

If your current investor isn’t keeping you happy or the service isn’t up to scratch, move on. Remember, banks aim to maximize their profits while building societies are more interested in providing the best service for their members.

10. You can become a normal borrower again

If you were self-employed or had a bad credit history when you took out your existing mortgage, you probably have been put on a greater rate than a normal borrower. You could get a better deal and a cheaper rate by remortgaging.

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