Remortgaging
Remortgaging is an excellent way to get out of very high interest rates
Even if they are fixed interest rates and you are able to take advantage of some of the superb mortgage deals that are on offer currently.
You can also remortgage your house if you want to buy something that is quite expensive. In fact if you have owned your house for a couple of years or more then it is likely that it will be worth more than your mortgage, so by having a new mortgage you can use that extra cash to spend as you will.
Remortgaging will also be of benefit if you are on a mortgage that has a variable rates and you are sure that interest rates are on the up; you can switch over to a fixed rate package prior to rates escalating and you are better off!
Adding Up ALL The Costs!
Remortgaging does incur fees so before you get carried away it is important to investigate just how much a new mortgage will cost you!
First of all you need to think about the arrangement fee and any administration fees for your mortgage. The arrangement fee alone can cost up to £1500 . Next is the mortgage valuation fee. This can cost between £150 and £300, depending on the lender and how much your property is worth.
Then you need to think about whether there is any early redemption penalty attached to your mortgage. If there is then this can be up to 6 months worth of extra interest payments so be wary if a penalty applies.
You also need to consider if a Higher Lending Charge applies. This applies if you are borrowing in excess of 75% of the property’s value; if so then you could have to pay a Higher Lending Charge, which can be a substantial amount of money.
Unless your mortgage provider offers you the chance of free legal assistance you will also have to factor in the costs of a solicitor. Finally you need to think about land searches and land registry searches and these can also add up.
You should also be aware that if you have negative equity ie you owe more on the mortgage than the house is worth, you have to secure more money to cover the difference. If this is the case, please do not remortgage unless you really have no other option.
Adaptable Mortgages
If you have had your mortgage for a long time then you will probably find that there are far more mortgage options on offer and that these include flexible mortgages. They can really help you to manage your mortgage so that you could take a payment holiday or make underpayments. You can even increase your monthly repayments as and when or make a lump sum payment if you can afford to. So if you make additional payments you can save a substantial sum of money as well as being able to pay off your mortgage early. This flexibility allows you the chance to really manage your mortgage and make it fit in with the way you live, instead of you being a slave to your mortgage!
