What are the advantages of remortgaging? In other words, why should anyone consider a remortgage? There are many different and good reasons to make a person want to go for a remortgage. The two most important reasons, however, are to raise money and to save money.
How does remortgage help in saving money? Remortgaging helps you reduce monthly loan repayments. You may also be able to enjoy lower interest rates if you remortgage. The aim is to avoid paying more than you need to for your mortgage.
How can you raise money from remortgaging? Remortgaging helps you to free up some equity in your home. You may want to consolidate debts or maybe even release some cash for home improvements. Home improvements elevate the value of your property.
Some people choose to remortgage with their current mortgage lenders to avoid fees (penalty charges) that may arise from switching to a new loan provider.
People who have a mortgage in Scotland keep their eyes on remortgage deals with the intent of landing a better deal than what they currently have.
Towards the end of the period of initial fixed rate, your mortgage may jump to a higher rate of interest and thus increasing the number of your monthly repayments. Remortgaging helps home buyers and buyers to hop on to a better deal with a different mortgage loans provider.
Who Qualifies for a loan Remortgage?
Qualifying for a remortgage requires you to have an existing mortgage. Then, you must meet the criteria set by the new mortgage provider.
Most home buyers seeking remortgage plans are those who have come to the end of the fixed-rate duration and those who have exhausted their discounted deal offers. Such people know that they may end up paying SVR Standard Variable Rate. SVRs may not be the best deal there is in Scotland, and this calls for the need to look for favorable remortgaging deals. Remortgaging can significantly impact your mortgage by helping reduce the amount for your monthly repayments. Just to give you a sense of what extent of savings you can get on your mortgage via remortgages deals, most people can bargain and get a 5.5% or at least 4% which immediately reflects in your monthly repayments.
The Perfect Time to Remortgage
If you have a deal such as a discounted deal, and that deal comes to an end, then it is time to consider remortgage deals before you are made to start making higher repayments by your current mortgage lender. At this point, you need to look out for better remortgage deals in the market. The Scotland remortgage market is full of attractive deals. Therefore, do not wait until it’s too late, thus giving you an opportunity to enjoy a flawless transition to your new deal.
Another important as a factor to consider is the mortgage exit fee that lenders charge for leaving your current mortgage deal at an early stage. Weighing the benefits derived from the new deal against the mortgage exit fee is important in maximizing remortgaging advantages. In most cases, remortgage deals often recover the mortgage exit fee.
How long does settling a New Remortgaging Deal Take?
Well, this varies depending on several factors but in most cases it takes approximately a month to establish a remortgaging deal. After paperwork and home valuation on your property is also conducted you will receive a notice via completion statement from your lender.
Remortgaging comes with the following fees:-
– The cost of changing lenders (mortgage exit fee)
– Standard fee for terminating a mortgage deal (charged by the previous mortgage provider)
– Legal and home valuation fees
– Arrangement fees
– Advisors and mortgage brokers’ fees
Some of the fees as mentioned above are avoidable. For example, one can eliminate advisors and mortgage brokers and thus avoid fees associated with their services.