Remortgages

All you need to know about Remortgages

It is estimated that 1 in 4 people are overpaying on their mortgage which is why people are now keener than ever to remortgage. Lenders throughout the country are offering competitive deals with the likes of low Annual Percentage Rates (APR) and low introductory offers however remortgaging your property may not always be the best option.

To remortgage or not to remortgage?

Remortgage put simply is switching your current mortgage deal to a better offer ultimately the borrower should benefit financially although this is not always the case. The mortgage is usually transferred to another mortgage provider.

There are various reasons why people choose to remortgage primarily of course this remortgaging is a money saving exercise. Individuals may remortgage to consolidate existing debts although the majority of people choose to switch for a lower APR or because an introductory offer with the initial lender may have expired.

Remortgaging to a lender offering a lower APR isn’t always beneficial in the long run and certainly isn’t the only factor to consider. When opting to remortgage the new provider may require solicitors fees to be paid plus valuation fees, even if these have already been paid when with the initial lender.

Many banks and building societies which initially appear to be offering a better deal in the short term make up for this in the long run by extending the repayment period. It may result in the borrower being in debt for longer period of time and by choosing to remortgage individuals end up paying more than the initial outstanding sum.

One way to avoid paying the extra fees is to remortgage with the original mortgage provider, costs such as solicitors’ fees will have already been paid. The majority of mortgage providers are happy for borrowers to remortgage on a fairly frequent basis and there are now a wide range of competitive remortgage packages on the market.

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