Mortgages: Remortgaging your Home
Over recent years mortgage rates have fluctuated - quite dramatically in some cases. For example, for a typical 30 year, fixed rate mortgage in the 1980's you would have had to pay around 18% interest. These days it's closer to 5%.
If you were one of those people who mortgaged their home when rates were high then you may be able to make a significant saving on your monthly repayments by taking out a new mortgage, otherwise known as remortgaging. However, before rushing into it you should be aware that remortgaging comes at a cost. There are fees to be paid such as valuation fees, title deeds fees, solicitors fees and so on. That said, in many cases it will still be preferable to pay these fees as in the long run you will still save a huge amount of money.
There are a number of benefits to remortgaging your home, provided you're getting a good interest rate.
Lower Monthly Repayments - As mentioned above, lower monthly repayments are one of the real bonuses of remortgaging. However, it's not just the monthly repayments which will be lower, but over the course of your loan you will potentially shave thousands off it.
Changing your Loan Type - In some cases people just want to change their loan type. Perhaps they were on a variable rate mortgage and they don't like the instability they experience with that type of loan. By changing to a fixed rate mortgage they feel more secure knowing that they will pay exactly the same amount off their loan each month. For others who are nearing the end of their loan period and who have taken out a mortgage which requires a bulk payment at the end of the term, they want to avoid this so they remortgage.
Raising Capital - If you're looking to raise capital, perhaps because your home has increased in value or because you want to make some home improvements, then remortgaging can be a cheaper way to raise the money required.
Whatever decision you take on whether or not a remortgage is what you want, you must talk through your options and decision with a trained independent financial advisor. They will help you search for the best deals and give you advice on the types of mortgages and interest rates currently available.
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