Remortgage Deals: Top 5 Tips For Choosing A Remortgage Deal
There are a number of reasons why you might want to remortgage
. A remortgage deal could allow you to release equity from your property, to take advantage of a better offer following a change in the base rate, to exit your current mortgage deal if the introductory rate is ending, or simply to reorganise your finances following a change in circumstances.
For many people, remortgaging can have a big impact on their everyday life. Depending on the terms of your current mortgage deal and the size of your mortgage, you may find that remortgaging could save you hundreds or even thousands of pounds a year. In order to find the best option for your needs, use our top 5 tips for choosing a remortgage deal.
1. Research the market
Make sure you research the market properly before choosing a deal. You might be able to find a good remortgage deal with your current mortgage provider. However, you should check elsewhere in the mortgage market and make sure you do thorough research before making your choice. The deal you choose could make thousands of pounds of difference.
2. Consider extra benefits
As well as the monthly payments, which you can work out using a remortgage calculator, think about how other aspects of the deal could affect your life. For example, paying interest-only for the first few years will leave you with more money each month at first but it will take you longer to pay off the balance.
3. Consider other costs
Along with the benefits provided with each deal, take note of any costs you will incur. They could include exit fees charged by your current mortgage provider and setup costs charged by your remortgage provider. You need to balance up all of these costs and fees against any saving or benefits you will get from the new deal.
4. Think about the length of deal
Many remortgage deals will have an introductory rate which only lasts for two or three years, whereas you may take many decades to pay off the whole balance. So be realistic about when you will have the opportunity to look around for a new mortgage deal. If you are happy to go back and reassess your deal before the beneficial rate ends, a short-term deal could work. However, as before, you need to take into account the costs of changing your mortgage deal and think about whether they might outweigh the savings from choosing a short-term deal with a good rate.
5. Compare remortgage deals regularly
Remortgage deals change regularly, influenced by the base rate and a range of other market factors. Try to stay aware of what's available on the remortgage market and keep checking the different offers available, comparing them by using a remortgage calculator and by speaking to different providers about the various pros and cons of different deals. It may be a risk to change your deal, but staying put could be more of a risk if you are currently lumbered with an unfavourable monthly rate.
by: David P Walker
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