If you’re thinking about remortgaging your home, you're not alone. A recent study found that remortgage approval rates are at a nine year high.
What is a remortgage?
Remortgaging is the process in which a home owner switches their existing mortgage to a new deal.
This new deal could be with your current lender (called a ‘product transfer’), or it may come from a different provider. It doesn’t involve moving house or leaving your home, and the new mortgage will be secured against your home - just like your old mortgage.
Almost all home owners today remortgage at some point. In fact, very few people stick with their original mortgage for the whole term (for example, 25 years) until it’s paid off. Instead, they look for new deals that suit their current budget and needs. After all, it’s very likely that your financial situation will change during the lifetime of your mortgage and if so, it can be beneficial to find a new product or deal that suits your changing needs.
There are a wide variety of reasons to consider remortgaging your home. Every home owner has different needs. For example, you may want to borrow more money to fund other personal goals such as making home improvements, or it may simply be that you want to switch to a cheaper deal so that you can save money.
Some of the principal reasons when thinking about remortgaging your home include:
- To reduce your monthly payments
- To fix monthly payments so they won't rise for a specified period, regardless of market conditions
- Raising funds for personal projects
- Raising funds to pay for home projects, such as renovating your home or building an extension
- Releasing capital to help children fund a deposit on a home of their own
- Using the extra money to consolidate any debt you may have
However, there are a few things that you should consider before you look for a remortgage, such as:
- Whether there are any penalties attached to your current mortgage, such as an early repayment charge
- The lender may want to carry out its own property valuation
- Make sure you have all of the information that you needed when you applied for your first mortgage, including proof of income
- Seek mortgage advice from an expert such as Trussle to research your options and ensure that you choose the best deal for your circumstances