To get a better deal on a current mortgage, or if more flexibility in what a mortgage offers is required, remortgaging should be considered. It is an increasingly popular option for homeowners: more and more people are being offered cheap remortgage quotes by mortgage lenders and mortgage brokers due to the increasingly competitive nature of the business.
What is Remortgaging?
Remortgaging simply involves moving from one mortgage to another. Borrowers are not required to move house, or even switch lender, as their current provider may offer an attractive remortgage deal if they are unhappy with their current mortgage.
There are many reasons why homeowners might want to remortgage their home, one being that they might have come to the end of their existing mortgage deal and are reluctant to pay their lender’s high standard variable rate. Other valid reasons might be that they want to switch to a fixed rate mortgage or a capped rate mortgage, or want to alter the pattern of their monthly repayments by switching to a different variable rate mortgage.
Remortgaging a property can take over a month, so it is best to start looking for anyone interested in remortgage deals just before their current term comes to an end. General remortgage advice suggests the borrower should have a clear idea of the estimated value of their home, the percentage of the value of the property they want to loan, and their annual household income. Specialist remortgage comparison websites will help them choose the best remortgage deals, and they can compare various offers including mortgages on fixed or tracker rates. These remortgage rates can be increasingly competitive between lenders, so considering the current lender for a different mortgage deal in addition to other mortgage providers is always a worthwhile option.
Similar to a first mortgage, a remortgage also requires extensive paperwork and a property valuation is necessary. When the process is complete, the borrower will be notified with a completion statement from their chosen lender.
Bad Credit Remortgages
Even those with a bad credit history can be offered a remortgage quote. Certain remortgage brokers can locate cheap bad credit remortgage deals, which are available to homeowners who would fail a standard credit check because of missed loan payments. Because of the growing demand for bad credit remortgages, many lenders offer very competitive remortgage offers, irrespective of a borrower’s credit rating.
Advantages of Remortgaging
Certainly the main benefit of remortgaging is the opportunity to borrow money at a cheaper remortgage rate compared to standard loans. Additionally, instead of saving money, remortgaging also enables the borrower to raise money by releasing some of the equity on their house if they choose the best remortgage broker.
Disadvantages of Remortgaging
However, there are drawbacks to such mortgages, including additional mortgage fees which may counter any benefits of a low rate remortgage offer. The remortgage process can also take some time to complete, and paying off current debts over a longer timeframe may increase overall costs even if it decreases monthly payments due to lower mortgage rates.
Professional remortgaging advice should therefore be sought to weigh the pros and cons of switching mortgages, and approaching the current mortgage lender at the beginning of the process could result in an immediate remortgage deal.