There are a variety of reasons people look to arrange a remortgage. Whether you want to cut your costs by moving to a more competitive rate or simply need to raise some extra cash, remortgaging can work for all kinds of purposes.
Cut your costs with a better rate
There are two options when changing your rate:
- Make a product transfer with your existing provider; this is when you swap the mortgage you have to another one without borrowing more cash.
- Swap to a new lender; your new lender will pay the capital owing to your old lender via your solicitor. You then continue to pay the new mortgage according to the terms of the agreement. These remortgages are usually limited to a maximum loan-to-value (LTV) of 90%, so you’ll need enough existing equity in the property or a 10% deposit ready.
As with any financial market, the mortgage business changes constantly. For more information and to see if a remortgage is a good move for you right now, get in touch and we’ll connect you with one of the expert whole-of-market remortgage brokers we work with.
Get cash by borrowing more money
If you want to remortgage to release equity from your property, the process is the same as a mortgage swap. The important difference being that the additional money you borrow is paid to you via your solicitor.
When you’re borrowing more money, most lenders will limit the loan-to-value (LTV) they’ll offer depending on what you intend to use the extra money for. This will affect the equity you will need to have to meet the lending criteria.
Is now a good time to do it?
At the time of writing, now is an exceptional time to consider remortgaging. In the aftermath of Brexit and the global turmoil created by the Coronavirus pandemic, interest rates are at their lowest level in history (0.1%). Many lenders are currently offering mortgage deals at super low levels which could make it a really good time to make a switch.
The stability offered by a low fixed rate might be a wise move as we are likely to enter a period of financial uncertainty.
It’s very important to remember that there’s no one-size-fits-all approach to financial advice. Whether remortgaging is right for you depends on your own individual circumstances, so seeking advice is vital.
To find out what kind of rates you might be able to get by remortgaging your property or to understand how much money you might be able to raise through remortgaging your property, speak to one of the mortgage brokers we work with.
As whole-of-market experts they are in constant touch with all the UK lenders and will be able to advise you of your options, taking full account of all the circumstances.
Is it a good way to pay off debts?
In the right circumstances, it definitely can be. Many of our customers remortgage to clear debts. With the right remortgage deal it’s possible to take your debts from expensive high rates and steep monthly repayments to much lower rates, spread over a longer term, resulting in far more manageable monthly outgoings.
The cost of remortgaging to pay off debts will depend on your specific situation, how long you wish to secure the debt, the type of mortgage you get and the interest rate you’re on.
By rolling up unsecured debts into a mortgage, the cost of paying them is likely to increase if the term of the mortgage is longer than that of the unsecured debt. It’s very important to factor this into your thought process and consider all other options.
Get in touch for a free, no-obligation chat and we’ll connect you with one of the remortgage experts we work with. They will be happy to answer your questions, and help you get a clear picture of all the costs involved. They will then be able to use their whole-of-market access to find a remortgage deal to suit your specific needs.