Remortgage – this is transferring a mortgage from one lender to another. This move can be beneficial for the borrower when a very high level of competition amongst lenders leads them to provide more attractive lending offers. Another reason to consider remortgaging the loan is if the client requires to:
– Raising capital – if the client has sufficient equity he can withdraw some funds. Buying a new car or home refurbishing.
– Debt consolidation – loans can have high-interest rates and sometimes it can be very good move to add them to the mortgage if you want to reduce your monthly payment. You need to consider the fact that by consolidating debts within your existing mortgage you have secured debt on your property which was previously unsecured and it will take you longer to repay those debts. As a result, the total amount you will pay may increase.
Think carefully before securing other debts against your home – by consolidating your debts into a mortgage, you may be required to pay more over the entire term than you would with your existing debt which could increase the amount of interest payable overall.
As there are many different reasons to Remortgege it is always recommended to check if the existing lender can offer a new Mortgage product which meets client expectations. A Mortgage Adviser will inform you about all of the benefits and disadvantages.
Remember you should consider contacting a Mortgage Adviser when your fixed term is due to the end, as it could be possible to reduce your monthly payment or mortgage term.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it. You should think carefully before securing other debts against your home.