When’s a Good Time to Remortgage Your House?

When’s a Good Time to Remortgage Your House?

When clients are looking to remortgage their property they are in most cases coming to the end of their existing product term and need to find a new product, which may involve researching what the market has to offer and not just accepting a product from their existing lender.  Many clients are looking to carry out home improvements and need to borrow extra funds to cover the required work.

Other clients who are looking to remortgage tend to be clients who need to raise funds to clear existing unsecured credit which may be in the form of high-cost credit cards or loans, some of which may have late or missed payments.

In all circumstances clients should contact their unsecured credit lenders to request written confirmation of the settlement amount, including any early repayment charges, to ensure there are no last-minute painful surprises when you come to settle the debt.

Other clients may be looking to raise funds for business reasons, and they of course should look at all their options because raising funds for business purposes, secured against your residential property, does carry a degree of risk should the business run into financial problems in the future.

At A Mortgage 4 You we are of course more than happy to do the research for you to find the right product to meet your needs and on the most competitive terms.

If you have a poor or bad credit rating, we may have to do a little more research to find a lender who will accept the less than perfect credit rating in addition to meeting your requirements on the level of borrowing you are looking for. With our many years of expertise in the mortgage market, we would look to see what we could offer you today, or whether it would be advisable to wait until your credit rating had improved.

We would recommend whether you could make any improvements to your credit rating which in some cases may require settling some of your existing short term credit accounts. In some cases, we could include this within the new remortgage.  Another option that may prove acceptable, is a second charge loan enabling you to amalgamate all your existing credit into a more structured and easy way to repay your loans and build a better credit profile, which could then lead to a remortgage on improved terms.

In today’s very competitive market, and where in the foreseeable future we expect interest rates to rise, a long-term fixed-rate would be a very good choice to make. We would of course give you all your options within our recommendations, however, the final choice would always be yours to make.

If we are looking at the long term, you would expect to see the value of your property increase, and in the market today around 10%pa is not unusual. The increase in value of your property and the fact that you would expect to repay some of the capital each year would mean that you are increasing the equity in your property. What does this mean to you?  Well as any lender would advise you, a lower loan to value would always attract more competitive terms, as a low loan to value (LTV) means less risk to any lenders, which in turn generally means a lower interest rate on any mortgage.

Planning Your Future

People remortgage their homes for all sorts of reasons and reducing their interest rate is just one of them. You may choose to remortgage a property so that you can release some of the equity and use the additional funds to enable you to purchase another property, which could be a Buy To Let property or a Holiday home for your own use. This will of course have an impact on your plans for the future so you will have to make sure that you have a plan in place to repay the debt in the long term. It is always advisable to carry out an annual review of your financial position to see if you can make any changes to allow you to repay the mortgage earlier than planned

If you’re planning to fund your child’s education, help a family member get on the property ladder or you want to finance home improvements, remortgaging your home could give you access to the funds you need. 

When you know that you’ll want to remortgage in the future, be sure to keep an eye on interest rates and offers. This will give you the ability to plan your remortgage at a time when the base rate is relatively low, and therefore enable you to access low-interest rates on your new mortgage arrangement. 


Avoiding Early Repayment Charges

Many mortgage providers include early repayment charges in their contracts, which means that you’ll need to pay a fee if you choose to end your agreement early and remortgage with a new deal or another lender. 

You’ll need to examine your current mortgage deal to determine whether early repayment charges or exit fees are applicable and, if so, how much they are. In some cases, switching to a better mortgage deal can lead to substantial financial savings, even if you have to pay early repayment charges. In other situations, waiting until your current deal ends and avoiding exit fees can be more advantageous. 

What Are Your Remortgage Options?

Knowing when it’s a good time to remortgage depends on numerous factors, including your current deal, your financial situation including your credit rating, and your plans for the future, which should include when you hope to retire, making sure that you are in a position to repay the mortgage prior to retirement.  With a handy remortgage calculator, you can see how much you’re likely to be able to borrow.  Our experienced mortgage advisers can help you to find the best remortgage deal on the most competitive terms for your individual circumstances

To learn more or to start searching for a remortgage deal now contact A Mortgage 4 You on 0800 802 1003.

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