Your current mortgage is probably one of the most significant financial commitments that would last you for years. As such, do know that you don’t necessarily have to stay with it if you have other options. Your unique financial circumstances might and would probably change over time, which could give you a good reason to consider remortgaging. Below are things to keep in mind before you go ahead and remortgage.
Factors to Consider Before Remortgaging
In the simplest terms, remortgaging is the process of moving the remainder of what you still owe on your current mortgage into a brand-new mortgage deal or product. According to Conveyancing Supermarket, an expert in conveyancing for remortgages, you could remortgage with your current lender or go to a different lender or bank altogether.
What is your reason for remortgaging? The most common causes could be:
• It is almost time to renew your current mortgage deal.
• You are looking to switch from repayment to interest-only.
• You are looking to obtain a better deal than the one you currently have.
• You need to borrow more cash.
• You want the chance to make overpayments.
Check if your current lender would charge you an early repayment fee that you would need to pay off before allowing you to remortgage. Also, see if the other lenders offer you a new mortgage deal free of charge. Once your current mortgage deal is almost up, various lenders would write to you and provide you with mortgage deals. Otherwise, check how much the fees would cost as these could negate the money that you could have saved if you had remortgaged instead.
Calculate your LTV, loan to value ratio, to see where it is at. Basically, the lower it is, the better the mortgage offers.
Estimate the associated fees for remortgaging. These would typically include an exit fee, early repayment fee, valuation fee, broker fee, conveyancing fee for remortgage, and your new monthly mortgage repayments.
Remortgaging would only be worth it if you can get a better mortgage deal than your current mortgage and if it could help you with your financial goals. You likewise need to ensure that you’re mortgage-ready. This means that you have a good score since your new lender would take this into account when deciding what deal to offer. Taking all the above factors into consideration, you could then make a more informed choice and decide whether to remortgage or not.