You Ask, We Answer: How Do I Know If It’s a Good Idea to Remortgage in Essex?
You Ask, We Answer: Essex Remortgage – How Do I Know When It’s a Good Idea?
Do you want to pay less each month on your mortgage? Or maybe you wish to pay off your mortgage as soon as possible. If you are a homeowner with a mortgage, one good alternative is to go for a remortgage. This article will look at the concept of remortgaging and how it can be known whether it is a good idea.
How Does a remortgage Work?
Essentially, a remortgage involves a process wherein you pay off your current mortgage and borrow a new mortgage under a new set of terms. Typically, homeowners will use the funds from the new mortgage to pay off the old one. Based on your new mortgage’s terms, there may or may not be some cash you are left with, which can be used to invest, pay down debts, renovate or for other purposes.
Refinancing To A Lower Interest Rate
Mortgage interest rates usually fluctuate over time. Thus, it is quite common for people to refinance a mortgage at a lower rate. Suppose you initially borrowed your mortgage with interest rates of 3%. In that case, it may be possible to lock in a new mortgage at a lower rate. Remember that it can be difficult to “time” the mortgage market, and thus, it is best to get in touch with your mortgage professional and learn if the time is right.
Remortgage For Lower Monthly Payments
One more significant use of refinancing involves reducing the monthly payment that is needed on the mortgage. If you have ten more years left on a 20-year mortgage, refinancing for the extension of the payments to 15 years decreases the monthly payment.
Refinancing To Eliminate Other Debts
Lastly, several homeowners choose to refinance their mortgage to use some of the home’s equity to pay off other debts. For instance, a family may have £25,000 in debts with an interest rate higher than their mortgage. If they have developed adequate equity, they can refinance and draw £25,000 from the home’s value. This alters the debt from the higher interest areas into the mortgage, which can be paid off over time.
There are a host of reasons to refinance your mortgage. If you want to learn more regarding the remortgage process or discuss your alternatives, get in touch with us today, 01277 564022