The Best Reasons to Remortgage
We’re diving back into the digits, finessing the financials and making the most of your mortgage with our favourite mortgage expert, Colleen Sykes – the Hampshire Mortgage Mum.
If you’re thinking about remortgaging (or you don’t want to admit that you’re not really sure why you might remortgage at all), let Colleen give you the insights you need to get the most out of your potential remortgage deal.
And ps…. It’s really easy to remortgage (and there might be the odd incentive thrown in too!)
Here are Colleen’s 7 reasons to remortgage!………
Your current deal is about to end
Many of the best mortgages only last a short time – often two to five years.
When your mortgage comes to an end, your lender will most likely put you onto a standard variable rate (known as an SVR). This is likely to be higher than your old interest rate and higher than some of the better deals out there.
Before your mortgage ends, start taking a look at what else is on offer – there might be a much better deal available to you!
(And, of course, ask for advice from a professional if you’re unsure which might be best for you).
To save you money + get a better rate
If you’ve been put onto an SVR, or you’re wanting to make early repayments without incurring early repayment charges, you could save money by remortgaging.
Colleen explained that for some of her clients she’s been able to secure them some very significant savings – purely by looking at how they want to pay off their mortgage.
Essentially, by shopping around and getting tailored advice, you could save a good chunk of money every single month.
Your home has gone up in value
If the value of your home has risen rapidly since you took out your mortgage, you may find you’re in a lower loan-to-value band, and therefore eligible for much lower rates!
Do your sums and you might be able to release some useful funds – perhaps to spend on an updated kitchen, a bathroom refresh, that much needed loft conversion or a lovely chalet office in the garden!
The amount you’ll be able to release will depend on several factors – so make sure you’ve got some advice before you start planning your next project.
To lock in a low interest rate
At the moment (2021) we are seeing lenders reducing the low loan to value fixed term rates for longer term mortgages.
Medium term fixed rate interest rates are at an all time low, so if you want to ensure that you get the lowest rate possible over the next 5 years, it might be worth looking around whilst deals last. A low interest rate on your mortgage means that your monthly payments could be lower, freeing up more money for… well, whatever you like!
To consolidate debt
(There is a caveat here – this does not include ‘bad’ debt such as CCJ’s etc. If you need help with so-called ‘bad’ debt, speak to a financial adviser before taking any action).
To reduce a mortgage term
If you want to pay your mortgage off sooner than your original term, you could be remortgaged onto a lower rate mortgage, meaning that if you continue to pay the same monthly payment, you could pay it off over a shorter term (a shorter period of time).
As is often the case, this option might be appealing as the sooner you pay off your mortgage the sooner you can retire! If that’s not a reason to check out your options, what is?!
You want to build a property portfolio
If your remortgage could release equity, you might be interested in using it as a deposit to fund an investment property. Many people are using that equity to help with the purchase of buy-to-lets, holiday lets or even to fund the purchase of a first property for a loved one or dependant.
Investments such as building a property portfolio are one of the many ways you can start preparing for retirement and building a nice nest egg to enjoy!
Fabulous Colleen serves the Hampshire area as our local Mortgage Mum.
Whether you’re looking for advice on How to get mortgage ready in 6 months or How Covid-19 will affect getting a mortgage, you’re looking to jump on the property ladder, move house or find out more about your mortgage options, Colleen’s the mortgage broker with the financial goods to get you started!
Colleen has kindly offered our readers a free re-mortgage advice call, to let you know which, if any, of the above options are right for you.
You can contact Colleen on 07787 430181 and you can email her at Colleen@themortgagemum.co.uk
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