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Why is this time Right to Remortgage your property?

Why is this time right to Remortgage your property:

The UK mortgage market has been extremely active since the last recession when worldwide base rates hit historic lows. Even though base rates have started to creep up gradually, many think tanks believe it will still be awhile before they get anywhere near their traditional levels prior to the 2008 recession caused mainly by the mortgage sector crash. As a consequence, it makes perfect sense for homeowners to at least investigate the opportunities to remortgage their property and reduce high interest charges.

Even though some property markets around the world have struggled since the 2008 mortgage crisis, many luxury property markets have enjoyed significant growth. As a consequence, when remortgaging it may also be possible to utilise a degree of the increase in property values in recent times. Assuming you’re able to secure relatively low mortgage rates, fixed for two, five or even 10 years, there is the opportunity to slash mortgage payments and increase net investment returns in the longer term.

While a remortgage might be a good financial move for many homeowners, it isn’t right for everyone. People who are already in a stellar mortgage deal or who own less than 25% of their home probably won’t find a deal in the remortgage market. Borrowers with bad credit or very small mortgages may also find the process of applying and paying for a remortgage is not worth the effort or the money.

Here are some pros and cons for you to consider before moving forward with the remortgage process.

Some of the pros of remortgaging include:

  • The ability to borrow at a lower interest rate
  • The option of utilising your home’s equity for additional cash
  • The opportunity to switch to a product more suitable to your financial situation
  • The flexibility to consolidate your debts into a single, affordable monthly payment

There are some drawbacks to a remortgage as well, which include:

  • Stretching your debts to a longer time frame increases the overall cost
  • When your home is used as collateral, it can be repossessed if you cannot keep up with the payments
  • There are fees attached to remortgages, which may counter any of the benefits you might receive from negotiating a lower rate on your loan
  • The remortgage process can take a number of weeks to complete, so you will need to be committed to the process to see it through to the end

Source: Islay Robinson (Enness)

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