Once you’re on the housing ladder, you may feel as though you are trapped in your situation. Getting a foot on the ladder is extremely useful, and owning property can open doors and provide a base to build a family or integrate into an area. However, where you live in the UK may determine how soon you might be able to join your fellow homeowners.
Indeed, the Office of National Statistics suggests that house prices in England and Wales ranged from £25,000 in areas of Sunderland to £5.9 million in areas of Barnet. But what happens if you are on the housing ladder and want to make some changes? Is it time to look into taking out a remortgage on your house?
Remortgage to Save Money
A remortgage involves taking a new mortgage out on a property you already own. This can replace your current mortgage to renegotiate costs or to borrow money against it to fund a new business or costly home improvements. Experts estimate that around a third of all mortgages in the UK are actually remortgages. One of the primary reasons for switching mortgages is to save money. This can occur after your previous fixed-rate mortgage ends. Most good deals expire after a few years, and then you are placed on the standard variable rate, which is higher. Even if you are tied into a mortgage rate, but spot a better offer, sometimes it can be worth remortgaging to take advantage of this deal. The benefits of doing this vary on a case by case basis, so check with a remortgage calculator offered by sites such as Trussle to see how much you can save based on your property and circumstances.
Remortgage for Other Circumstances
Another reason to investigate whether you should remortgage your house is if you suspect your property’s value has increased since the initial mortgage was set. If your home improvements or the growth of your local area have increased your property value, you may find that you are on a lower loan-to-value band, which could bring down the rate you pay. So, taking out a new mortgage would be sensible.
Another common reason for taking out a remortgage is down to the fact that mortgage lengths are so long that circumstances in life change during the tenure. You may earn more money or have been bequeathed an inheritance since the initial mortgage and wish to repay more. But, some terms won’t allow for this, or will only let you make a minor overpayment. So, switching to a mortgage that suits your lifestyle may end up being beneficial in the long run. Even if you want a more flexible mortgage where you can occasionally bypass a payment, say if you have a job that pays more sporadically, a remortgage could be the solution.
Deciding to take another remortgage on your house is no small matter, and due diligence should be done. By weighing up the pros and cons of taking out a remortgage in conjunction with the banks who may offer the best deals, you should come to a consensus that reflects what is best for you.