Reasons to consider a remortgage.

Remortgage Guide:  #2

Reasons to consider a remortgage.

To get a better rate

Many home-owners remortgage to get a better rate. An alternative mortgage deal at a lower rate may have a considerable impact on house-hold outgoings. For those on a soon to end fixed rate deal, it makes sense to shop around. Whatever the motivation for seeking a better rate, it is important to calculate the impact of a new mortgage deal to get an idea of the likely new monthly payments.

Debt consolidation

Debt consolidation is one of the main reasons people consider remortgaging. Home-owners with multiple debts can acquire funds through remortgage by using their home as security, the cash released can then be used to clear these debts. Always think very carefully before securing borrowing against property, as it will be at risk if you fail to meet the repayments.

Home improvements

Home-owners often remortgage to release funds to carry out home improvement work on their property. Spending in this manner is considered an investment as any improvements made may well increase the properties value in the long term.

Changing financial situation

Due to a change in circumstances, perhaps due to illness or job loss, some home-owners find themselves unable to meet mortgage payments. In these circumstances remortgaging is one of the options that may be available. It is important to seek immediate advise before getting into arrears.

Equity release

Remortgaging is a way of releasing equity in your property in order to benefit from a rise in property prices. The money release can be used for any purpose such paying university fees. Remortgaging in this manner amounts to further lending and therefore should not be entered into lightly.

Endowment Shortfall

Millions of people in the UK have been told to expect a shortfall on their endowment. Home-owners with endowment policies will be responsible for paying off their mortgage on the due date, even if their investment has performed poorly. For home-owners with a shortfall, it may make sense to remortgage to convert to a repayment mortgage as this will ensure the debt will be cleared at the end of the mortgage term.

Next - #3  Choosing a remortgage