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You can remortgage your property if you find a better deal elsewhere, it could be that another mortgage company are offering a different mortgage product that would work out cheaper for you. Remortgaging is often used as a way to save money, it can also free up the equity on a property. Should your property now be worth more than your original loan amount then you can remortgage to create finance for any purpose. It could help you reduce other debts you have or you could simply just buy something that you really want. You could remortgage in order to lower your monthly repayments making life easier for yourself.
Before you decide to go ahead and remortgage then you should make sure that you will not have to pay any early redemption charges. It is quite possible that if you
have an existing fixed, capped or discounted rate mortgage, or if you received a substantial cash back when you took out your current mortgage then you WILL be charged for early redemption on that mortgage loan. If you remortgage before the end of the period in which you are enjoying benefits, then you will probably have to pay your present lender a number of months interest. If you have a money back or Cash Back mortgage, then you may find you will be asked to pay back all of this money.
If you have reached the end of any special offer period on your mortgage then you should be able to remortgage without incurring any early redemption charges.
Step 1: Search the market for a mortgage that would suit you better. It could be that you are looking for lower monthly payments. You can search online or you can use a mortgage broker to help you find the right mortgage for you.
Step 2 : Find out if there are any early redemption charges on your current mortgage, consider whether it is worth waiting until your tie in period is over and then remortgage, or is it actually going to be cheaper to pay the early redemption charges and move to another lender now.
Step 3 : Find out if the new mortgage company is going to charge you any legal or valuation fees, very often in order to attract customers, mortgage companies will waiver these costs.
Step 4 : It is always worth contacting your present lender informing them that you are considering moving your mortgage to another lender because they can offer you a better deal. They may try to compete to keep your custom by offering you an even better deal.
Step 5 : Weigh up all savings as well as costs. Make sure it is going to be worth your while remortgaging. Ideally a remortgage should save you money straight away and annually consumers should see substantial savings.
Equity Release Loans
If you have seen the value of your property increase considerably in recent years then you could remortgage in order to raise finance. This finance can be used for any purpose and is very popular amongst UK homeowners. Essentially equity release is a large loan which is secured against a percentage of the customers home. Usually up to 25% of the properties value may be used, and the exact amount borrowed could be dependant on the applicants age. The cash released from equity release loans could be used for extensions or improvements which would add further value to the property.
Home Reversion Schemes
Home reversion schemes consist of selling off part of a property in return for a lump sum. The right to live in the property is still retained but should the property be sold or a death occur, then the percentage owed to the reversion company has to be repaid. UK home reversion schemes normally allow the release of finance between 25%-90% of the properties value.
Mortgage Roll-Up Plans
A UK mortgage provider will lend money against part of the value of a property, the interest is added to this loan so the overall size of the loan is increased. A Mortgage Roll Up Plan can be repaid either when the property is sold after a death or it can be settled by relatives in order to retain possession of the property. Mortgage roll-up plans generally allow the release of 20% up to 50% of a property's value.