Questions to Ask If You Remortgage Your Home

If you take out a new mortgage without moving home then you are remortgaging or refinancing your property.  There are three main reasons for remortgaging your home.  Typically people who are looking for remortgage quotes in the UK want to do one of the following things:

• to release equity from their home perhaps for an extension, to pay for wedding or to support a child through university
• to pay off other higher rate debts such as store or credit cards
• to take advantage of a better mortgage deal

Remortgaging your property is often relatively straightforward because, in most cases, you are simply transferring your debt from one lender to another.  Although you may also be increasing the size of the debt.

Key questions to ask if you are looking for remortgage quotes in the UK are:

Is Refinancing My Home A Good Option for Me?

Individual circumstances vary and it depends on what you want to achieve but factors to take into account include:

• are you sure that you can make the repayments?  You may lose your home if you do not.
• it can be harder to find a mortgage at a good rate if you have just changed from being employed to self-employed.  Most lenders like to see a track record of steady income.  If you have made this change, is the timing right for you? 
• an attractive feature of mortgages is that repayments can usually be spread over many years.  This does mean that the total interest payable may be high.  Taking a short term loan e.g. a car loan and converting it into a long term mortgage may be an expensive option.
• If you are seeking to address the problem that your income is generally less than your expenditure, remortgaging your home without addressing the underlying issues may be unwise.  You may give up some equity in your home without solving long term problems.
• Depending on your age and the length of your mortgage term, refinancing your home may mean that in the future you will face a choice between moving into a cheaper property or working beyond the age when you would like to retire.

For many people, though, remortgaging their home may be a sound financial option.

Will My Existing Lender Charge A Penalty?

By moving your mortgage from one lender to another you are repaying your first mortgage early.  Some mortgagors charge a penalty for doing this.  Take any penalty charges into account in assessing the financial benefits of remortgaging.

What Are the Set Up Costs?

Typically these will include valuation fees, solicitors fees and arrangement fees.

What is My Credit Status?

A bad credit history may make it hard for you to get a quote at an attractive rate.  Click on the link for more information on credit ratings.

Have I Got the Best Deal?

The remortgage market is very competitive so make sure that you spend time looking to find the best deal for you.  Even if you are only moving to find an improved rate, it is always worth approaching your existing lender.  They may be keen to put a package together for you to avoid losing a customer.

See the websites below for details of just some of the lenders and brokers who may be able to help.

• Central Capital Mortgages
• Finance Tracker Ltd
• Crystal Clear Home Loans
• Regency Remortgages

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