In today’s highly competitive market the well-informed borrower will often choose to switch their mortgage, after the introductory deal term ends, to take advantage of the new borrower market rates on offer. Those people who are not served by a professional mortgage broker will often remain on the standard variable rate their deal reverts to, for the full term of their loan, as lenders have no incentive to telling borrowers about more competitive terms on offer. In this case borrowers will lose out on enjoying the better benefits, which being proactive create, by swapping deals regularly. Doing so could reduce the amount paid back and that could turn out to be a substantial savings margin in many cases.

In simple terms, the process of re-mortgaging often involves switching one’s current mortgage to get a new deal, arranged with either a new lender or via the services of a mortgage broker. It is therefore important that you do adequate research well before opting for one choice or another. Why should you re-mortgage? Here are the top five benefits of re-mortgaging:

 

To Save Money

If you are paying your lender a Standard Variable Rate commonly known as SVR, it is likely that your lender may offer you a better rate, as well as greater flexibility, from their new borrower available products. When you choose the new option you should be saving some money from your monthly mortgage repayments. However, to avoid any overall unnecessary cost, you should ensure that you select the best package in terms of rate, set up cost and term which ball have an influence on the total amount of money that you repay monthly.

 

Have A Flexible Repayment Schedule

When repaying your mortgage, you should know the degree of flexibility that you will need to give you peace of mind depending on your financial ability. Re-mortgaging could help you to repay your mortgage sooner than you thought, especially if your current lender does not provide greater flexibility on their products. This may make you want to consider switching your mortgage to a different lender to help you enjoy their packages if you think looking for flexible payment schedules will suit your needs.

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To Raise Money

Higher income, or an increase in the value of your property, means you can increase your mortgage to release cash for a number of lifestyle expenditure needs such as funding the university costs of your child, their wedding costs, or that future retirement home in the sun! Borrowing against your house is often the lease expensive source of capital that you will have access to.

 

To Prevent Moving Home

With the meteoric rise in SDLT, plus the cost of selling agent’s commissions and other general moving costs, it can often be cheaper, and at the same time more convenient, to add or adapt an extension to your current home paid for by re-mortgaging, or even further advance, as opposed to moving home.

 

To Consolidate Your Debts

Through re-mortgaging, you can release some of your equity that you have built up in your home and consolidate other debts, like credit cards or a car loan, which attract higher interest rates when compared to that of your current mortgage. There are pros and cons to this approach. On the one hand you will likely see a massive reduction in your monthly outlay to these short-term commitments but on the other you will extend the term over which this debt repayment is to run if linking it to a traditional long-term mortgage. Definitely one to be wary of and to only consider with professional advice!

In conclusion re-mortgaging, and the continual process of reviewing your mortgage arrangements, should be part of your lifestyle plan especially when there are so many variables thrown at you in your personal life, your job and the general economic environment.

 

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If you have questions to ask you are more than welcome to call us on 020 8441 2605, or 01442 232 272, or email us at infolondon@osfg.co.uk