Get A Better Deal On Your Mortgage Product
If you’re the type of person who shops around for the best deals on your mobile contract or utility bills, don’t forget about your mortgage!
The number of people opting to remortgage their home is on the increase. February 2019 saw 18,200 customers choosing to remortgage to acquire funds, which was a significant increase of 10% in comparison to February 2019. The low base rate and equally affordable fixed interest rates have a lot to do with this trend, which is a situation that is likely to remain stable in the coming months. If you’ve been wondering about remortgaging, either to release some cash or else to take advantage of a better mortgage product, this guide will help you to make the right decision.
Current Deal Due To Expire
The most common reason to remortgage is when your current mortgage deal is about to end. Perhaps you’ve been on a low rate tracker or fixed mortgage for the past 2-3 years. Once your discount finishes, your product will be moved to a standard variable rate (SVR) which often ends up costing hundreds more in repayments each month. Savvy homeowners choose to shop around for a better deal, perhaps fixing at a low rate for a further 2-3 years with a different mortgage provider.
Has Your Home Gone Up In Value?
If your property is worth far more than when you first purchased it, you will find that your loan to value ratios have also changed. A remortgage brokers Wirral based expert explains that if the amount you’ve borrowed is suddenly much less than the value of your home, you may discover that you belong in a lower Loan to Value (LTV) category which means that you’ll also be eligible to mortgage products with lower interest rates.
Releasing Cash for Home Improvements
If you’ve built up significant equity in your home, either because you’ve been paying off the capital for quite a few years, or else the value has changed, then you may wish to release some cash. This is a popular scenario for homeowners who are looking to carry out renovation works on their home. Instead of taking out an additional loan, or putting money on a credit card, it can make sense to release some equity from your home to pay for that kitchen refurbishment or ground floor extension. Due to the value that some home improvements are able to add to the worth of your property, it can make perfect sense to remortgage in this scenario. Effectively, you’re borrowing from your home only to plunge the money straight back into the property again.
If you’ve decided that remortgaging is a good opportunity for you, then you may be wondering what the next steps are. Begin by finding out exactly when your current mortgage deal is due to end; ideally, you’ll start to make arrangements a couple of months in advance of this expiring to give you time to arrange a new product before you get moved to a higher interest rate. It’s best to speak to a professional mortgage broker who will have access to a wide range of lenders and will locate the most suitable product to switch to. Be aware that remortgaging may involve paying penalty and/or arrangement fees, so it’s important to speak to a professional who will be able to get the best deal for you!