There are a number of reasons that you may want to re-mortgage your home. You may have found a better deal than the one you’re currently getting, or you may need to free up some money for something else, such as debt consolidation. No matter what the reason, re-mortgaging is an option for many, and this guide will help you to decide whether re-mortgaging your home in Perth is the right choice for you.
The cost of re-mortgaging
The costs may partially be similar to buying a home and getting a new mortgage, with your new lender asking for a survey on the property. In addition to this, your old lender may penalise you for paying your mortgage off early. This is called an early repayment charge, but is not in the terms of all mortgages.
The best time to do it
If you were given a special deal when you signed up to your mortgage, or a fixed rate, you may find that your repayments are too high now that the offer is no longer valid. If this is the situation that you are in, or you want to find extra money to pay off other debts or make an investment, re-mortgaging may be an option for you.
The plus points of re-mortgaging your home
There are many plus points, the main one being that you may be able to save money by switching to a mortgage with a lower rate. If you are in debt that you are looking to consolidate, the re-mortgage may be able to offer you the funds to do this whilst reducing the stress of having multiple debts. You may have signed up to an unsuitable mortgage due to bad advice, and plan to re-mortgage to get the best deal for you.
The negative points of re-mortgaging
Sometimes, you will be charged a fee for ending your current mortgage early. However, if this fee is less than the amount you are saving by switching provider, you may wish to go ahead and re-mortgage anyway. There may also be other fees included, all of which should be researched in advance and factored into any final decision.
Another negative point is that the overall process takes time. It could take up to 8 weeks to complete, so if you need the money urgently this might not be the most accessible option for you. You should also be aware that by re-mortgaging, you are borrowing money against your home, which means that if you get into more financial trouble in the future, there is always the risk that it may be repossessed.
What your new lender will consider
Like any other loan, your lender will consider your situation before making any kind of final decision. This will include asking about your reasons for re-mortgaging your home, and considering whether your wage is enough to cope with the repayments on the new loan. Your credit rating will also be checked, and your history with regards to making previous mortgage payments to your current lender.
Getting a good deal
No financial decision should be taken lightly, so it is vital that you consider your options. Online comparison websites are a great place to start looking at potential rates, and this could give you an idea of which providers offer the mortgage that you are looking for.
Although re-mortgaging your home may seem like a daunting prospect, it could give you access to the money that you need, and this means that it is certainly worth taking the time to research your options before you come to a final decision.