Remortgaging can help you to save money every month, and be a good way to get a lump sum of money, instead of taking out a personal loan.
What is a remortgage?
A remortgage is when you take out another mortgage on your home to replace your current loan or to borrow extra money against your property.
Why would you want to remortgage?
You would remortgage a property to either raise or save money:
You can raise money by releasing equity in your home and taking out a new mortgage that is larger than your existing one. You could do this to consolidate debts, make home improvements or fund something else in your life.
You could save money by remortgaging and switching to a cheaper mortgage provider. You will need to check the terms of your contract though to make sure you aren’t charged any early exit fees.
How could you improve your home?
If you can release equity in your property, you can use these funds to improve your home and potentially increase its value. You may be able to build an extension, make repairs or update a property to raise its market worth.
This could prove to be a sound investment in the long-term, but we’d advise you seek expert advice before deciding to borrow money against your home.
What are the risks of remortgaging?
When you remortgage for a larger amount than your property is worth, you are borrowing more money against your home. If you borrow money and do not keep up with the agreed repayments, your home could be at risk.
If you feel you cannot commit to higher repayments than you are already on, we’d advise you consider remortgaging to release equity with caution.
When shouldn’t you remortgage?
You should not remortgage if your existing mortgage debt is small or if your property’s value has dropped. If your repayment charge is large or if you have little/negative equity in your property, we’d also advise you steer clear of remortgaging, as this won’t benefit you in the long run and could put you at a financial detriment.
Get advice today
We are experts in offering solutions to people with bad credit and can help you if you need a helping hand with your next move. Visit www.clever-mortgages.co.uk today.