Have you had that feeling that just as you were getting comfortable, there was something around the corner that’s going to stir it all up? Remortgaging perhaps is a bit like that. Circumstances change all the time and remortgaging your property happens due to some reasons and not without it’s advantages. Lets explore some reasons why remortgaging in London, UK works and why remortgaging is an option that will help you.
Remortgaging explained
Simply said, a remortgaging means, moving your existing property mortgage from one lender to another. This would also mean that your new mortgage would be replacing the existing mortgage.
Remortgaging is done for a number of reasons. But in most instances it could and the most common could be the following:
- You’re at the end of your existing mortgage rate and would like to revise the rate if it is more attractive than what you are currently paying
- Planning to borrow extra money against the property
- You think that you could get a better deal or rate with another lender than what your current lender is offering?
So if you are evaluating your existing mortgage in London and think that you may be faced with a decision, the above reasons might be a good way to consider if you are going in for a remortgage or not.
Remortgaging a house in London, UK
If you’re at the end of your existing mortgage and you’re a home owner for many years, you’re probably very happy with your property. But as time goes on, houses do require maintenance which can get more frequent as the years go by.
This would obviously mean putting aside a significant portion of money for home renovation costs. Considering escalating costs of maintenance, some tenants may consider moving out of their residence by remortgaging the property instead of spending on renovations and general up keep.
Although this might be a hard decision to take, it might be a wise way to cut down on high costs that keep escalating. In recent times with the post pandemic economy, remortgaging houses in London, UK that require a high maintenance cost seems to a practical solution not only to save up on expenses, but also provides opportunity of a new premises that will keep your maintenance costs low as well provide the satisfaction of owning a new home with a renewed easy to pay mortgage rate.
Of course the final decision to renovate or go in for a renewed mortgage ultimately lies with the house owner, making the right choice will certainly decide the outcome of his/her financial benefit.
Remortgaging borrowing more money
Remortgaging your property to raise money is another reason you may want to remortgage your property.
Before deciding on remortgaging, you may need to decide on the property and it’s value. You may want to get your equity or valuation done by using a valuation service to ascertain it’s true potential of sale. You may also get an idea by following this example:
- Subtract the amount you owe on your mortgage from the value of your home. If your home for example is valued at £500,000/-, and you are still having £300,000 to pay as your mortgage.
- Deduct the amount you are liable to pay from the value (£500,000 – £300,000), and you are left with the value of the property you own.
- In this case, it is £200,000 and your lender owns the balance £300,000, it would amount to about two thirds of the initial mortgage.
- According to the above example, you are able to generate £200,000 if a remortgage is done, which you will be able to allocate for purchasing another property if you wish to.
This is a great option to consider especially if you are hoping to expand your purchase possibilities of another property.
Remortgaging for better lending rates in London
Just like any other business or venture in London, losing out on your investment is the last thing you want. And went it comes to repaying a mortgage, you may find that re-mortgaging brings that better option to help you with your re-payment plan. And this about getting a better deal from your lender. However, getting a better deal from your initial lender might not be the case all the time. And this is when remortgaging will help.
By remortgaging, you can opt to finding a better deal with another lender if your present lender can’t bring about the change you are looking for. If for example, your current mortgage is £ 250,000/-, a re-payment span of 20 years, with a 5% interest rate, you may find that rates have gone down since your initial mortgage and want it changed. With this option, you could get a better deal for the same capital amount, but with a 3% reduced interest rate with a 20 year pay back period. This certainly is a good way to pay your mortgage back with a reduced interest. There is however a catch. As in most mortgages if not all, when ending an existing mortgage on fixed rates, you will have to incur an early repayment charge. This might be a significant amount to consider when changing your lender.
Conclusion
While remortgaging is done by many property owners, self evaluation before taking the step to remortgage needs to be done, if to gain by it. In these examples we clearly see the advantages and disadvantages of remortgaging and for the reasons specified.
To gain on your deal, you may consider remortgaging. And it would be a good idea to be in touch with a mortgage broker from a trusted company in London such as BVS Mortgages and Financial Services to reap the benefits in full. Make sure to make the move when the time is right, after all, its your future, and this might be just the right time!
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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