Can I re-mortgage my property?
Re-mortgaging your home can bring many benefits. If you are coming to the end of the discounted or fixed-rate period of your current mortgage and are about to switch to a higher rate, then re-mortgaging may be a good way of helping you to get a better deal and save on your monthly repayments.
You might be looking to free up some of the cash you have already invested in your home by taking out another mortgage against your property and investing it in, for example, home improvements, a new car or even a second home. Whatever your reasons for re-mortgaging, if you go about it the right way, it can help you save a significant amount of cash in the long run. To help you make the right choice, My Mortgage Pro has created the following guide aimed at answering the question: can I re-mortgage my property?
What is re-mortgaging?
In basic terms, a re-mortgage is simply taking out a new mortgage on a property you already own. You can do this to access a better interest rate and save money on your monthly repayments or to borrow against your property if you need access to some additional cash and don’t want to take out an unsecured loan.
The thing to remember with re-mortgaging is that while in many cases, it can save you money in the long-run, but in some cases it can cost you more, so you should bear in mind the total cost of your re-mortgage over the term before you do it.
Re-mortgaging to get a better deal
One of the main reasons why people re-mortgage is to get a better deal. If you are coming to the end of an existing fixed-rate mortgage period or are even on your lender’s Standard Variable Rate, then switching mortgages – or even lenders – can often save you money.
Most mortgages come with an introductory deal, which is usually a better rate of interest, whether it’s a fixed-rate mortgage, a tracker or a discount mortgage. If you’ve still got a lot of mortgage to pay off, switching can save you money in the long run, even when arrangement or exit fees are taken into account.
If, however, you have only a small amount of mortgage left to repay, it might not be viable to switch. A mortgage broker with expertise in re-mortgaging will be able to talk you through your options and help you make the right choice.
Re-mortgaging for flexibility
Lower monthly repayments aren’t the only reason why re-mortgaging might be a good thing. You can sometimes re-mortgage to get more flexible terms of, for example, you want to overpay your mortgage, but you aren’t able to with your current provider because you may incur a fee.
If that’s the case, re-mortgaging to a deal with the same rate of interest, but more flexible conditions can save you money in the long run.
Re-mortgaging to free up cash
If you have invested a lot of cash into your current property and have built up some equity, you could re-mortgage against your property to free up some of that cash. It means you will have to repay it at some point, and you could end up repaying your mortgage for longer than you had planned, but this could be a more cost-effective way of borrowing if you can find the right deal.
Again, because of the complexities surrounding re-mortgaging to free-up cash, an expert broker will be able to guide you through the process and help you find the solution that’s right for you and helps you to achieve your financial objectives, whatever they may be.
Re-mortgaging to consolidate debt
If you carry a lot of debt besides your mortgage, then re-mortgaging can sometimes be a good way of consolidating it all into one easy payment. Mortgage rates are often lower than personal loans and credit cards, so borrowing against your property to pay down your debts can, in some instances, be a good option.
However, as with other reasons for re-mortgaging, it’s always worth bearing in mind that taking on a bigger mortgage might mean you end up paying more in the long run or taking longer to pay off your mortgage in full. Again, before you take the plunge, you should seek the advice of a professional mortgage broker who will talk you through the options and recommend the best way forward for you.
Contact us for more information about re-mortgaging
My Mortgage Pro is a professional mortgage information service. While we don’t give advice, we aim to provide you with simple, jargon-free, no-nonsense information about re-mortgaging and equity release to help you make the right choice. We can also connect you with a specially selected panel of leading mortgage advisers, who are authorised and regulated by the Financial Conduct Authority, who will provide advice tailored to your specific circumstances and help you find the right re-mortgaging solution, fast.
To find out more and request a call, fill out the form below.