What is a remortgage?
The term ‘remortgage’ simply refers to the act of switching your mortgage to another product or lender. Remortgages have been popular in the UK recently. This is because people remortgage in order to switch to an improved mortgage rate, more preferable conditions, to increase the size of the loan or for better customer service. This therefore makes it possible to substantially reduce your monthly mortgage payments. You can go to a variety of organisations in order to remortgage. Banks, building societies, specialist lenders and mortgage brokers can all provide a remortgaging service.
In order to ensure that you get a better deal, it is important to understand the costs and repayment terms in order to compare the deals accurately. Depending on the provider, you can usually remortgage up to 95% of your property. If you have repaid a substantial amount of your mortgage, and are aged over 55 you could also consider an equity release plan, rather than a remortgage. These are aimed at retired people who can’t afford the repayments on a traditional remortgage.
What are the potential benefits of remortgaging?
In order to judge whether the remortgage deal is right for you, you need to be aware of the costs. It is possible that you may have to pay a solicitors fee and also for a valuation. It is also possible that you may have to pay a fee to the new lender. However, if these costs are calculated properly and then compared to the savings you can make by switching to an improved product or lender, you will be able to see the potential benefits.