A remortgage is where you take out a new mortgage to pay off and replace your existing mortgage. There are plenty of reasons to do so. Remortgaging will not always be the right decision for every homeowner but could be an effective way to achieve the next step in your home ownership goals.
Reaching The End of Your Fixed-Period in York
We tend to find, homeowners usually set their rate for 2-5 years, enabling them to keep the same consistent interest rates for that period.
A homeowner will typically look to take out their remortgage towards the end of their fixed period. Here at Yorkmoneyman, we tend to contact our customers about 6 months earlier, so we can go through the background process, allowing a smooth transition when a mortgage ends and your new one starts.
It is important not to remortgage any earlier than this, to avoid any potential early repayment charges.
Alternatives to a Remortgage in York
It is also important to understand the alternatives before considering remortgaging. For example, some homeowners may want to remortgage to create more space in their homes. Whilst this could be one option, other homeowners may simply look to move elsewhere.
Another option is doing a product transfer. While a remortgage usually takes out a mortgage with a new lender, a product transfer switches to a new deal with the same mortgage lender.
Finally, if you are above the age of 55 and own a property that is worth at least £70,000, you may have the possibility of taking out an equity release plan. We recommend you speak with a qualified later-life mortgage advisor in York to see if this is the right option for you.
Ask for a personalized illustration to understand the characteristics and risks of a lifetime mortgage. A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means-tested benefits. The loan plus accrued interest will be repayable upon death or moving into long-term care.
That is why seeking remortgage advice in York might be a good option and speaking to a remortgage advisor in York can help in many ways. Below we listed some of the most popular reasons we hear why homeowners choose to remortgage.
Remortgage for a Better Term or Deal
One of the most common cases where a homeowner might want to remortgage their home is so that they can get a better mortgage term or mortgage deal.
When your introductory or fixed period ends, you will switch to your mortgage lender’s standard variable rate (SVR), which is typically a higher rate of interest and therefore more costly.
It is exceedingly rare that this will be a better option for you, so the vast majority will instead look to remortgage onto a much better deal. Using the equity that is in their property, they will have access to a lower loan-to-value deal, lowering their interest rates and overall costs.
If you prefer to pay off your mortgage quicker instead, you may also have the option of keeping your monthly mortgage payments the same, whilst reducing the overall length of your term. This will also possibly save you money, as you will be paying less interest overall.
Remortgage to Release Equity
Every home will have an amount of equity built up. This equity is the difference between the property’s value and the remaining mortgage balance. As the balance decreases, equity increases. If the value of the property increases, so does the equity.
Homeowners may have the option to remortgage to release equity, to use for a variety of means. Here we listed some of the main reasons you may want to look into equity release in York.
Remortgage for Home Improvements
Over time, you may need to make some necessary changes to your home, especially if you prefer to live there rather than move elsewhere. Our mortgage advisors in York often speak to customers who are looking for remortgage advice in York, to discuss their options to remortgage for home improvements.
These home improvements can be from a home extension to create some extra space, make some improvements to the existing rooms or completely remodel your kitchen, it can be a great option for homeowners to make these changes and sometimes add value to your property.
Keep in mind that most mortgage lenders will want to see quotes for the work that is to be carried out if this option is something you are looking to do.
Energy Saving Alterations
More important than ever before, a homeowner may want to spend now and save later by making energy-saving alterations.
The installation of solar panels has become popular for some as an energy source, as well as devices that can convert wind into energy. Insulating your walls, and replacing doors and windows. These can be great options for those who want not only to be greener but also to save money.
Remortgage for Debt Consolidation
Whilst a remortgage to consolidate debts can be a great option for some, it is not a decision to be made lightly, and we would recommend taking remortgage advice in York ahead of time.
Debt consolidation will typically see you combine your unsecured debts with your mortgage, into o a single manageable monthly outgoing. Although it will hopefully reduce your expenses, it will cost more overall on interest, as it will extend throughout your term.
You should think carefully and speak with a mortgage advisor in York before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
Gifted Deposits
Another reason why a homeowner may look to remortgage to release equity is to provide someone they know with a gifted deposit. This is more common with parents who will release part of their equity so that their child can get onto the ladder of the property.
This gifted deposit can be used as all or part of the deposit for a house that their child wants to buy. You will also have to sign a form stating that this is a gift, not a loan, and evidence of where the funds came from.
Free Remortgage Review in York for all Customers
If you are heading towards the end of your fixed period and are looking at remortgaging advice in York for either one of the options mentioned above or even perhaps another reason altogether, please feel free to get in touch or book your free remortgage review to speak with one of our remortgage advisors in York today.
You will benefit from their expert remortgage advice in York. They will search thousands of remortgage deals to help you find the most suitable deal for what it is you are looking to achieve.
Date Last Edited: December 19, 2023
