Reasons For Remortgaging Your Property
Why Would I Need to Remortgage My House?
There are many reasons for people to remortgage their home, whether its to save money, release money or clear debts. One thing to keep in mind is that it may be best to remortgage at the end of your mortgage product otherwise you may be charged an ‘early repayment charge’.
Remortgage for Home Improvements
Maybe its time you needed a new kitchen, a completely new bathroom suite, or maybe that open-plan-living extension? One of the popular reasons people remortgage is to carry out household improvements that are usually fairly substantial in cost dependent on what you need doing. For example, you might want to extend your kitchen into a utility room to make it bigger, and it is here you need to consider other factors such as architect plans, builders’ fees, planning permission, building regulations and material costs.
Remortgage to Raise Capital
Aside from the other reasons mentioned here, remortgaging to raise capital in general can help you with cash-flow, whether you are looking for a much-needed holiday, a new car or to provide more money to enjoy life after retiring. Perhaps you want the capital in order to help your children out in getting themselves a head-start on the property ladder. There are many reasons on why people look to remortgage to raise capital.
Remortgage for an Extension
One of the biggest reasons people look to remortgage their home is to provide themselves with sufficient cash-flow in order to carry out an extension. Remortgaging for an extension is probably one of the most common methods of raising the funds to carry out this substantial job, and it not only provides more living space for the owners but also adds value to the house.
Again, you need to check the equity that you have in the house before doing this and whether it is viable. You also need to keep in mind that remortgage payments will change.
Remortgage to Consolidate Debts
If you have debt that has built up over a number or sources such as credit cards and personal loans then remortgaging to consolidate these may be an option. There are pros and cons to this depending on the level of debt that you need to clear. It’s not always the best idea to remortgage to pay off debts purely because you might end up paying more back overall if the loan is over a long period, despite the favourable interest rates that are generally lower than unsecured loan products and credit cards.
Remortgage for a Better Deal
With most remortgage deals you will be given an introductory rate which will usually expire after a set amount of years, moving you onto a Standard Variable Rate (SVR). At the point of the introductory period ending is when homeowners look to move onto a new remortgage deal with the aim of obtaining a better interest rate.
Whichever category you fall into, it is always best to shop around and check any incurred administration costs involved in remortgaging your property, including any early repayment fees that you could potentially incur if you try to remortgage too soon into a current mortgage.