01789201914 enquiries@capc.uk.com

5 reasons why you might want to remortgage your home

Very rarely do you take out a mortgage and stick with the same one for the whole term i.e. 30 years until it is paid off and you’re mortgage-free (oh, the dream!).

Each household is different and there are various reasons why you might look to remortgage. Perhaps you want to borrow more money or maybe you’ve seen a better rate that you’d like to switch to.

Here are some other reasons why you might want to remortgage your home.

1. The current fixed deal is up for renewal 

If you took out a fixed rate mortgage where you pay the same amount every month and the interest rate remains the same, once the initial term has ended (it would have been 2,3,5 years), you’ll fall onto a standard variable rate (SVR) where you could end up paying a higher interest rate than you were previously. This is usually the time when you might look to remortgage in order to switch to a better mortgage deal.

2. You want to move from interest-only to repayment 

Perhaps you’re on an interest-only mortgage and you want to move to a repayment mortgage. Generally speaking, your lender should be able to change this for you without the need to remortgage but if they can’t offer you the deal you want, then you might consider a full remortgage.

3. Want to be on a better rate?  

You might want to move to a mortgage that has a better interest rate but sometimes the lender requires you to pay an early repayment charge before you can switch. It’s important to weigh up the price of the early repayment charge (sometimes referred to as an exit fee or admin fee) against the costs you’ll be saving with the lower interest rate.

4. You want to make overpayments 

You might have a higher paying job now than you did when you took out your mortgage, meaning you now have more disposable income and can afford to make overpayments, but perhaps your current lender doesn’t allow you to. Therefore, you might want to look at changing over to a new mortgage with a lender who will allow you to make overpayments.

5. Borrow more money

Moving house can cause a lot of upheavals and can be very expensive by the time you’ve paid for all the fees and moving costs. Choosing to stay put and make home improvements can be a cost-effective way of getting the house you’d like.

In order to cover the cost of the improvements, whether for an extension, loft conversion etc., you might consider remortgaging. Don’t forget to do your research first though and weigh up the pros and cons of paying the early repayment charge, as you might find that a home loan is overall better for you than remortgaging.

Just be aware that your lender will want to know what you intend to use the money for and may ask to see builder’s quotes etc. as evidence.

 

 

 

In contrast, there are also times when we’d advise you against remortgaging…

1. Little equity  

If you owe your lender more than the property is worth, then you’re in what they call ‘negative equity’. It can be difficult to remortgage your house when you’re in negative equity – unless you have separate funds to repay the difference.

However, don’t just assume this is impossible. Everyone’s circumstances are different, just like every lender’s criteria is different, so it’s always worth speaking with a mortgage adviser to consider all your options.

2. Finances have dropped 

Lenders now have to see evidence of your income against your outgoings and carry out thorough credit checks. So if your income has dropped since you last took out your mortgage (perhaps you only work part-time now or your partner has retired) the lender might be more cautious about lending you the money.

3. Already on a low rate 

It might be the case that you’re already on a low rate and you don’t need to move to another one. Perhaps at that moment in time, there is no better rate than the one you’re on.

4. Large early repayment charges 

If you pulled out of your current mortgage deal before the term is up, it could well come with a hefty early repayment charge which might make you think twice about switching. However, some lenders might be willing to waive the charge if you’re sticking with them and are just moving to a new deal.

Let us take the hassle off your shoulders. Get in touch with us today and we can talk through your different remortgaging options.

 

For further information call: 01789 201 914

Or email: enquiries@capc.uk.com

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Contact our expert advisers now

Call free from landline or mobile

01789201914

Not the right time for a call? Email us and we can arrange a good time to discuss your needs

enquiries@capc.uk.com

Mortgage Blogs

What Protection Should I Consider When Getting A Mortgage?

What protection should i consider when getting a mortgage?   For most people, the biggest expense in life will be the mortgage for their house, so it makes sense that you think about getting protection in case you need help to pay your mortgage at some point in...

What Is a Mortgage In Principle

What is a ‘Mortgage in Principle’?  When you are in the early stages of applying for a mortgage, you may come across a number of terms that you are not familiar with or that you do not fully understand. The term ‘Mortgage in Principle’, sometimes referred to as a...

How To Get A Credit Score For Free

How to Get a Credit Score for Free  There are certain times when it is important to have a good idea of how your financial background will be regarded by potential lenders, for instance, when you are applying for credit and particularly if you are applying for a...

Does Gambling affect my mortgage application?

Does gambling affect your mortgage application?  Applying for a mortgage is a process that will involve heavy scrutiny of your financial history and current income and expenditure. A house mortgage is probably the biggest loan you will ever take out, so banks will do...

A Guide to Residential Mortgages

What is a residential mortgage   A residential mortgage is a loan of finance that enables someone to acquire a house to live in. The mortgage will usually be provided by a bank or building society, with a term agreed over which to pay back the loan. The amount...

The Ultimate Mortgage Guide

Are you planning to get a mortgage, but don’t know where to start? This ultimate guide to mortgages will tell you everything you need to know to secure yourself a mortgage.

7 Ways To Fall Back In Love With Your Home

Every now and then, everyone needs a little pick me up, including your home. Over the years, scuffs and scrapes can make a house look untidy and you can soon fall out of love with your home, which becomes a place just to rest your head, rather than a space to relax...

What You Need To Know When Buying A House With a Friend

Buying a house with a friend could be a great way for you to get on the property ladder quicker than if you were buying by yourself, plus, you won’t have to take the financial hit quite as hard when there’s someone to share the cost with. However, there can be some...

What’s the mortgage process for buying a new build home?

As we’ve seen from our previous article, there are many reasons why you might want to buy a new build home. Many people like the fact that the property comes with the safety net of guarantees, plus you can choose your own fixtures and fittings that suit your style,...

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances and loan amount. The fee is up to 1.5%, but a typical fee is 0.67% of the amount borrowed.

©2019 |CAPC is a trading name of Christopher Allen Private Clients Limited which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the financial conduct authority.

Christopher Allen Private Clients Limited. Registered Office: 7 Arrow Court, Adams Way, Alcester, Warwickshire, B49 6PU. Registered in England Number:08820469

We use cookies on this website to give you the best experience we can. To find out how to turn off cookies, have a look at our privacy & cookies policy