Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up your repayments on your mortgage
Looking to save money?
Remortgaging may be undertaken for a whole host of reasons. It could be to raise capital, raise a deposit for another property purchase, pay off expensive debts, change the type of mortgage or to simply obtain a far better rate to lower your monthly payments. Many customers are unnecessarily paying the higher reversionary rate. And this could be a remortgage for your main home or a buy to let property. But do remember turning short term unsecured debts into longer term debt secured on your property may not always be the right thing to do. Always think carefully before securing other debts against your home.
Many lenders offer a free valuation and free legals to secure your business as a homeowner. For a small extra cost, you can also change the basis of the ownership of your property at the same time. The correct ownership structure could provide you with greater flexibility and tax advantages. Our dedicated mortgage advisors and administration team can make the process simple and quick.
Some of you may have a mortgage which was at a high loan to value (LTV) when the property was originally purchased. Since then your property value may have increased and your mortgage amount may have reduced, meaning you can possibly switch to a lower price point and save money as your loan to value has improved. Your situation may have also improved such as income levels and credit standing which may also open up additional lenders which were not available previously. But if you are on the lender’s standard variable rate (SVR) for whatever reason, you really need to get yourself away from that.
For example, a 75% loan to value £300,000 repayment mortgage over 30yrs may have a monthly repayment of approx. £995 at 1.25%, but if you are paying at a Standard Variable Rate of say 3.75%, that same mortgage will be around £1,390pm. That’s almost £400pm more. In fact borrowing an extra £100,000 would take the total payment to only £1,335pm at the lower rate! And you can use the extra money for a new car, kitchen, holiday, investment property or a combination. This is just a basic example that clearly highlights the savings to be made by having the right mortgage. Based on your individual circumstances, the potential savings that can be made will of course vary and this is something we can assess for you. Max Mortgages can help you with this process. Have a look at our Repayment & borrowing calculators.
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Reasons for remortgaging:
- Obtain a better rate whilst keeping all other aspects the same
- Obtain a better rate and extract some equity for other objectives such as home improvements or buy another property
- Alter the mortgage type. For example you may wish to convert your current mortgage to a Buy To Let as you are moving out
- Alter the mortgage structure that may be better suited to your current plans / tax situation
- Add or remove people from the mortgage and the property deeds
- Take advantage of the low rates available and lock yourself in
- Applies to both residential and buy to let mortgages
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