What are the benefits of re-mortgaging?
As we mentioned above, there are three common benefits that people can reap from re-mortgaging. Before we discuss those in more detail, there is something we want to point out. A mortgage is possibly the largest financial commitment you will ever make; before changing mortgage providers, make sure you fully understand the new terms you will be entering and all of the re-mortgage rates involved.
The first, and most common reason, for re-mortgaging is usually to save money. Perhaps you feel you can get a better rate, or maybe the fixed rate term on your current mortgage is coming to an end. There are other reasons too, but the main point is that you can save money by looking for the best value re-mortgage deals.
The second reason in our list seems confusing because at the time you took out the original mortgage, it suited your needs but now it doesn’t. For example, maybe you had bad credit when you took out your original mortgage, meaning that you’re paying more interest now than you need to. Perhaps you’ve had a pay rise and would like to pay a higher amount off the mortgage but your current lender will not let you without a charge. In any case, you might need to consider comparing re-mortgage options to find the mortgage that is right for you and your family’s current needs.
The final point in our list mentions the need to raise money against your home. Please don’t forget the repeated warnings we gave earlier regarding re-mortgaging. This reason for re-mortgaging is why those warnings are in place as mortgage holders need to be very careful about borrowing money against their home. While it can certainly help in a pinch, it can also lead to much deeper financial issues. Failure to pay after lending against your home could lead to your home being repossessed.