Remortgaging: How it works
Taking out a mortgage is probably the single biggest financial venture that most people will face in their lifetime. After a few weeks (if not months) of paperwork and negotiations, you finally come to an agreement with which you are reasonably happy.
But what if your lender decides to significantly increase your monthly payments after your initial fixed-rate agreement? What if you suddenly find yourself looking at a consistently uncompetitive deal that you wouldn’t like to lock in for the next 25 years?
This is a scenario that will be familiar to millions of mortgage providers but it is an event that can be avoided by re-mortgaging.
After all, getting a good deal and saving a significant amount of money can be easier than you think.
Deciding whether to re-gauge
Choosing a rematch or not can be a daunting task but can be made easier with the help and assistance of an experienced broker.
It is important to remember that if you find a much more competitive deal with lower interest rates and borrowing costs, there are other factors to consider.
For example, most mortgage lenders charge exit fees and penalties for quick payments. Depending on the affordability of the new mortgage agreement, these fees may increase your savings.
Similarly, an introductory agreement offered by your new provider can eventually create an equal path Less Competitive long-term contract. If your credit is bad or your employment status has changed since you took out your mortgage, it may compromise your eligibility for a good re-mortgage agreement.
This is why it is important to consult with an experienced broker ahead of time who will conduct complex mortgage calculations for you, after which your broker will track and negotiate an unbeatable deal with a top-rated lender, which you will have little. But stack up against potential savings.
Why Apply for a Remortgage?
There are several instances where, including but not limited to:
- Your introductory fixed-rate deal is over, and your mortgage is being switched to a much less competitive variable-rate product.
- For whatever reason, you’re not particularly satisfied with your current lender and want to move to a more customer-centric provider.
- Changes in your personal or professional situation have made your current mortgage terms less than favorable.
Remotegaging can also be great for releasing some of the equity you have tied up in your home. When re-mortgaging, you can apply for a loan that exceeds the value of the original mortgage that you wanted to repay, leaving you with a sum of extra capital to use for any purpose of your choice.
Properly covered, it will withstand a great deal of adverse conditions. But since you have again stuck to a binding contract for many years, this is an issue that should be approached with the advice of a qualified professional.
Craig Upton supports UK businesses by increasing sales using a variety of online marketing solutions. Creating strategic partnerships and paying close attention to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of iCONQUER, a UK-based SEO company, and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as FT.com, djkit.com, UK Property Finance, Serimax and has supported UK doctors, solicitors and property developers to gain more exposure online. Craig has gained a lot of knowledge using Google and is committed to creating new opportunities and partnerships.
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