For every homeowner, there will come a point in time where your introductory period ends. If you are in the same mindset as most homeowners, you will probably be considering remortgaging your property.
If you would like to learn more about remortgages, please feel free to read our article “How Does Remortgaging Work? Remortgages Explained“. Alternatively, take a look at the “Moneyman” himself, Malcolm Davidson, discussing all about remortgages.
This ultimately depends on what it is you are looking to achieve. For many homeowners, a remortgage is the next logical step to improve their lifestyle or make the most out of their home, but it is not for everyone.
The role of a dedicated remortgage advice team is to review your circumstances, what it is you are looking to achieve, and see if this is the best route for you to take overall.
We offer a transparent service, so if it isn’t right for you, your mortgage advisor will inform you of such, offering an alternative if there is one for you.
Of course with any mortgage option, there will need to be some careful consideration ahead of time. There are a wide variety of reasons as to why someone may choose to remortgage their home at the end of their introductory period.
The biggest reason in recent memory is because interest rates are going up. Historically, interest rates are much lower than they used to be, so you may find that they are more likely to increase than decrease.
As such, it may be better for you to remortgage as soon as you can, to fix in for a specific duration, so that you can take advantage of the current rate. People generally opt for 2-5 year fixed rates, though in some cases you may be able to fix in for longer.
This type of practice could save you a lot of money in the long run, as the interest rate may have risen during that time, but you will still be paying the rate of interest that was available at that given time.
Sometimes it’s not because the interest rates are rising, sometimes it’s just to access a better rate that could be available to you. Over time, equity will build within your property and your property may have increased in value.
The equity within your property can be used to access a better loan-to-value. This means much better rates, potentially allowing you to save money or to reduce the length of your term, if this is something you would like to do.
Speaking of the equity within the property, other customers may choose to release it via their remortgage as a way to raise money to cover the cost of any home improvements, modifications or alterations they would like to make.
Whilst the mindset of some may be to simply move home for what they want in a property, for many, this is their home, they have built a life in it, raised or plan to raise a family in it. As such, it may be necessary to modify it to match their needs.
Frequently occuring choices include for a newly refurbished kitchen, to create a home office, for an extra bedroom, more living space, a conservatory or more. This in turn can increase the properties value, which can be very useful if you’re looking to sell down the line.
During the course of your term, you may have accrued unsecured debts against your name that have left maintaining all of your payments as something of a challenge. Though it has its risks, a popular choice amongst homeowners is to remortgage to consolidate debt.
This will combine all of your unsecured debts into your mortgage payments, as one monthly outgoing. Not only will this free up more funds per month and less outgoings, it will extend your debt over the duration of your mortgage, meaning it will cost more on interest overall.
You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
In some cases, a remortgage may not be the way to go. That is why it is always beneficial to take remortgage advice ahead of your introductory period ending, so you can speak with an expert in the field and determine the best path to take.
Your mortgage advisor may deem it more appropriate for you to take out a product transfer, wherein in you take out a new mortgage deal with the same lender. If you’re looking to find somewhere with more space, moving home may be more suitable after all.
In rare instances, it may be beneficial for you to fall onto your mortgage lenders Standard Variable Rate of interest, though this isn’t a common occurrence as it will usually be a lot more costly for you per month on your mortgage payments.
If you are over the age of 55 and have a property that is worth £70,000, it may be worth your while discussing equity release options with a qualified later life mortgage advisor. They can help you discuss your lifetime mortgage options, explaining the advantages and disadvantages to you.
Book yourself in for a free remortgage review today using our online booking feature, and a trusted and experienced mortgage advisor will run through your circumstances with you, giving clarity on which option is most appropriate for you.
To understand the features and risks of equity release and lifetime mortgages, ask for a personalised illustration.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.