Mortgage enables you to buy a property without paying anything upfront. The same property will serve as your collateral. A remortgage is like refinancing a mortgage. You acquire another loan using the same property as collateral. This article gives information on why lenders allow remortgages. What are the reasons for remortgaging?
What Is Remortgage and Why Do People Avail It?
A remortgage is an opportunity to refinance your property. Your existing deal may be ending already, and best deals last only a short time generally 2-5 years.
If you have a current mortgage but the value of that property increased you can apply for refinancing at a lower interest rate.
You may want to buy more money. Your home equity may help you raise funds for home improvements or pay off existing debts.
What Should You Do to Arrange Remortgages? +
You should get ready for paperwork months before your mortgage deal ends, typically 3-6 months before. Gather all documents related to the current mortgage, your bank statements indicating payments made.
Find out How Much a Remortgage Will Cost You? +
Go to your lender and ask for computation as to the costs of shifting. Exit fees need to be considered including Land Registry costs. You may need to pay legal fees, valuation fees, etc in applying for the loan. Use the lenders attorneys for you to save on costs.
Find the right mortgage which fits your needs. Check the rates around for you may strike a deal.
Ask your current lender if they be able to give you the same deal. It may save you money and time from moving. If they can match the transaction, go for it.
Seek help from professionals. You may ask your family, friends, and relatives for referrals. Check out Life’s Great remortgage quote.
Is It Possible to Avail of Remortgage with Bad Credit?
Remortgaging with bad credit is not a remote possibility. You should never expect very low-interest rates. If your credit is bad expect higher interest rate compared to other paying clients.
Lenders would require more equity from you. Lending money to makes it more risky for financial institutions. They will assess the current situation of your home whether it is in good condition or not in a flooded area.
Can You Remortgage Your House to Pay off Debts?
Credit card debt is considered a bad debt due to high-interest rates. It is not advisable to remortgage your house to pay off other debts like credit cards. For one thing, mortgage interest is tax deductible while interest from other debts is not.
Credit card debts are unsecured debts while remortgages are secured debts. Unsecured debts don’t require collateral. If you fail to pay a credit card debt, the lender can sue you for that. In secured debts like remortgages, the property is encumbered in bank’s favor. If you fail to pay the monthly amortizations, they can repossess your property. Shifting unsecured debts to secured might cause you to lose your priced property.
Remortgages cost you more money. You will incur more costs for evaluation and inspection. It damages your credit score as well.
Before deciding to avail of remortgaging think of the pros and cons. If you get an excellent deal, then go for it. Approach your lender or ask for advice from your friends, family or personal financial adviser.