How can I remortgage my house – The do’s and don’ts

Jul 12

How can I remortgage my house – The do’s and don’ts

Thinking about getting a new home mortgage? One thing you need to keep in mind is that remortgaging your home only makes sense if you are going to save a good amount of money in the long run. Some of the short term benefits may not be beneficial if you do not save money in the end. For some people, finding best remortgage deal is an excellent idea and can work to their advantage especially if it is handled properly. But for others it may not be such a good idea. You first have to weigh the pros and cons.

Why do People Remortgage?

To get better interest rates
To get rid of adjustable rate
Lower monthly payments
Shorter loan term
To save money
To clear outstanding debts
You want a lower mortgage payment
To consolidate outstanding debt
To take out equity

Remortgaging Doc´s

Lower interest rate – Only refinance if the new loan will give you at least 2% less in interest than your current loan.

Adjustable rate vs. fixed-rate – An adjustable mortgage interest rate is lower than a fixed rate mortgage; however adjustable rates fluctuate whereas fixed rates stays the same. Unless you are a risk taker, it is probably best to get a fixed-rate mortgage.

Better terms – It is okay to remortgage to a different policy with a better term.

Review interest occasionally – From time to time, it’s a good idea to review your mortgage and the amount of interest you are paying on it to see if you can remortgage it for a lower interest rate.

Overall a better deal – Do remortgage if you are going to lessen the lent of your mortgage and lower your payment.

Remortgaging Don’ts

Take your time – Do not be rushed into a remortgage loan. Make sure you do your homework first.

Early redemption charge – Do not remortgage your home if it is going to incur early payment charges – known as an Early Redemption Charge – for paying off your current mortgage.

Seal the deal – Do not sign any paperwork unless you are completely satisfied.

Remortgage checklist:

Are your tax papers in order?
Is your credit score up-to-par?
Is your employment record up-to-date?
Are the records of your first mortgage registered properly?

Getting a new home mortgage is a big financial move that you should think very carefully about before rushing into it – making sure to weigh all the pros and cons first. Be sure to do your research and have your mortgage lender inform you of everything you need to know to avoid surprises after it’s a done deal. With that said if you think that a remortgage is the right thing for you then by all means go ahead and do it.

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