time to remortgage

Knowing When It Is Time To Remortgage – You know what it’s like: you work hard all month to meet your mortgage payments, looking forward to seeing how much you’ve reduced the total by when you receive your annual statement…only to find the interest charged by your lender means you’ve barely scratched the service.

This is a common scenario for many women, and it can be quite demoralising. However, what some don’t realise is that you could reduce your monthly payment – and the volume of interest paid to your lender – by remortgaging your property.

If you’re not on the property ladder, click here to read our recent blog “Help To Buy ISA Scheme.

Paying off your existing mortgage and switching to another lender with a more competitive rate could leave you in a better financial situation, assuming exit and setup costs don’t prohibit it. Whether that’s giving you spare cash to treat yourself, or lowering your outgoings to help with on-going money management.

Why now is a great time to remortgage?

The stars are aligning for homeowners at the moment, as the consistently low interest base rate is resulting in some highly competitive mortgage deals being announced. Also, lenders are feeling their most confident since the recession; mortgage lending reached a two-year high in January, according to the Bank of England.

As your biggest financial commitment, the affordability of your mortgage shouldn’t be underestimated. Many women fall into the trap of signing up to a deal and then leaving it for years – resulting in them paying unnecessary interest to their lender on a variable rate, when they could be on a lower fixed rate.

Although the financial markets predict a 50% chance interest rates won’t rise until 2020, the only way to be certain that you’re not going to be affected by a sudden change in conditions is to take out a fixed rate mortgage.

Could remortgaging now open new doors?

As we’ve mentioned, for most women, mortgages represent the biggest chunk of your monthly outgoings. Remortgaging is the opportunity to reduce that financial commitment, in order to help with debt management, or simply increase your disposable income.

One important thing to remember, is that remortgaging should create positive change. Your home may be at risk if you do not keep up with the repayments for a loan or mortgage secured on your property, so make sure you have a financial plan to help you stay on track with your repayments.

How does the remortgaging process work?

The first thing to do is get your property valued – the better its loan to value (total value of the property in relation to the amount you wish to borrow), the greater number of deals will be available to you.

This is particularly important if there have been significant house price rises in your area, as you may not be fully aware that your loan to value has improved significantly.

Next, look at the mortgage deals available on the market and compare them to your current interest rate. Don’t forget to factor in any exit fees on your existing deal, or set-up fees on your new deal, as this might make an affordable interest rate less appealing when you tot up all the outgoings needed to switch.

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