Are you considering remortgaging your home? This is a very popular option for homeowners who are coming to the end of their current mortgage. They do it because they think it will save them a lot of money, plus it can also free up some cash that is currently locked in your property. As with any financial decision, there are plenty of advantages and disadvantages of remortgaging, all of which you will have to research. Think you are ready to take the plunge? Ask yourself these questions first to help you decide.
What Are My Financial Goals?
Most homeowners remortgage their home because it can bring down their monthly repayment amounts. In some cases, people can cut hundreds, sometimes even thousands, off the size of their mortgage. Other people decide to remortgage to try and reduce the length of their mortgage. This would mean going for a mortgage with a higher interest rate and, therefore, larger monthly repayments. To need to work out whether or not one of these situations is right for you, you need to review your financial goals. Will remortgaging help you achieve them? If so, then it could be the right thing to do.
Is It The Right Time To Remortgage?
Generally speaking, remortgaging will only benefit those who are coming to the end of their current mortgage. This is especially the case if interest rates have changed since you took out your deal. You should also look at the small print in your contract to see whether you are at a good point to change deals. Some mortgage lenders will only allow you to remortgage after a certain period. Others will add on fines if you choose to remortgage before a certain date. It is important that you understand these clauses, so you don’t incur any surprise fees. If you are confused by all the legal jargon in the terms and conditions of your contract, you could always speak to a specialist lawyer. To find out the best value lawyer, you could compare conveyancing quotes online.
Do I Have A Good Credit History?
Do you know how your credit history is? You will need to have an up to date report on your credit if you are planning on remortgaging. And, in order to get the best deal on a new mortgage, you will need to have a very good credit history indeed. If you have frequently missed repayments with your current lender, it will look very bad and affect your credit history. This could put off other lenders and banks from giving you a new deal as they might not trust you with repayments.
How Long Will I Be In The Property For?
You need to be very clear on your long-term plans before you remortgage. If you think you might end up moving out in a year or two, there is probably not much point in finding a new mortgage deal. However, if you are in a family home that will last you into retirement, then a more secure mortgage could help you secure your family’s future.