Why refinance your property?
If you have a mortgage secured against your property, it is probably arranged over a lengthy term, perhaps twenty, twenty-five or thirty years.
Yet the mortgage product you take when you buy your property will be priced for just two, three, or five years.
At regular intervals you will therefore find yourself considering your current deal, what options you have going forward, and whether you should change lender.
When you decide to re-mortgage, you apply for a mortgage from a new lender to replace your existing arrangement. That new mortgage is then drawn down via a solicitor and used to settle the mortgage with your current lender. Often, your new lender will offer to pay the legal costs of the re-mortgage as part of their product offering.
You may wonder why you should not simply stay with your current lender.
Whilst you will be offered product options going forward by your lender, these may not be the most competitive available. It is therefore worth asking an independent mortgage broker to review your circumstances on a regular basis and recommend the most suitable option from across the market.
Re-mortgaging can also give you the option to change some of the basic terms of your lending as your lifestyle and requirements change. You may want to pay off a lump sum, or raise more cash, fix your interest rate, or reduce your monthly payments.
Refinance – key considerations
There are a number of key things you need to consider when reviewing your mortgage.
Firstly, you need to ensure your current lender will not apply an early redemption charge when you settle. You should also look at the charges on the new product and any changes of terms or benefits that will result if you move your mortgage to another provider.
If you are using a re-mortgage to consolidate credit card debits or personal loans, you should be aware that through re-mortgaging you will be offering your home as security for these debts.
If you wish to re-mortgage to remove a former partner from the home you will need to be in a position to manage the mortgage payments alone.
If you are considering a remortgage the best course of action is to get expert advice and help.
Our team are waiting to assist you – contact us now.