Remortgages - Worth The Switch
Below is a MRR and PLR article in category Finance -> subcategory Mortgage.
Remortgaging: Is it Worth the Switch?
Overview
Remortgaging has become increasingly popular as homeowners look to benefit from better mortgage deals. Essentially, this involves switching to a new mortgage, and sometimes a different lender, to secure more favorable terms.
Why Consider Remortgaging?
If your financial situation has changed since you first secured your mortgage, or if your initial mortgage's special rate has expired, you might find it beneficial to switch. Remortgaging can help you save money, but there are several factors to consider:
Potential Costs
1. Early Repayment Charges: Check for any penalty charges on your current mortgage. Even with these fees, the long-term interest savings could outweigh the penalties.
2. Associated Fees: Consider costs like valuation fees, solicitor fees, and any charges for setting up a new mortgage. Some lenders offer incentives like cash-back or fee-free deals, so weigh these against potential savings to determine if switching is worthwhile.
Mortgage Types
Many are opting for new types of mortgages that offer more flexibility:
- Flexible Mortgages: Allow greater control over payments.
- Current Account Mortgages: Merge debts, savings, and current accounts for better interest rates.
- Offset Mortgages: Keep accounts separate while still benefiting from the ability to transfer funds, without a large overdraft appearing in your account.
Equity Release
If your home's value has increased, remortgaging can release equity, providing a cash lump sum. The amount you can borrow depends on your income and property value. For retirees, equity release schemes offer ways to access cash or regular income through the home's value without moving:
- Home Reversion Schemes
- Roll-up Schemes
- Home Income Plans
Always ensure any scheme is a member of Safe Home Income Plans (SHIP) to protect your interests.
Conclusion
Remortgaging can be a savvy financial move if approached with care. Assess all associated costs and benefits to ensure switching will truly enhance your financial situation.
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