Many people find themselves in the position of needing to re-mortgage their home, and although most have heard about it, not many know how to actually do it, or why it might be the right decision to make. If you need a better deal on your mortgage loan you may decide that re-mortgaging your home in Stirling is the right thing for you to do. This guide will give you the information that you need in order to decide whether the decision you have come to is the right one for your needs.
How much does it cost?
In a similar way to when you first take out a mortgage, there are a range of legal costs involved in re-mortgaging your home. Your new lender will probably ask for a survey to be completed, and the lender that you’re moving from might apply a charge for ending your term early. This is not the case with all mortgages, though, so it is important to understand your own individual terms.
When is it best to re-mortgage?
Many people decide to re-mortgage their home at the end of a fixed-term interest rate, as this is when their monthly repayments are likely to rise. The payments may no longer be manageable, meaning that a lower deal is necessary. Other people decide to re-mortgage when they are trying to consolidate debts, as a lump sum may help them to do this.
What are the positive points of re-mortgaging?
Saving money is the main concern when most re-mortgage a home – whether that is by reducing the interest rate of the loan, or avoiding having to pay further interest on any other debts that might be standing. If you are consolidating debts, a re-mortgage could remove some of the stress of owing money to more than one place, with everything included in the single monthly payment of the mortgage. If you feel that you were given bad advice when you first took your mortgage out, a re-mortgage gives you the chance to find a deal that is better for you.
What are the negative aspects to consider?
Firstly, it is important to be aware that this process does not happen immediately, and it does take a certain amount of time for the funds to clear. Overall, it could take as much as eight weeks, meaning that if you need the money immediately, a re-mortgage might not do much to solve your problems. If you struggle with debts, a re-mortgage means that your loan is secured against your home, so if you fall behind with the payments it could be taken from you.
In addition, you may be charged an early repayment fee from your current lender. This is not always the case, and even if it is, you may find that this fee is lower than the savings you would be making by switching.
When you take out any kind of loan, your lender will always want to ensure that you’re able to make the repayments. This means that your income and outgoings will be checked, in addition to your credit score. If you have missed payments on other loans in the past, this could work against you and the eventual decision.
How to get a good deal
Looking at an online comparison site is a great way to start seeing what’s out there, and booking appointments with promising lenders is the next step.
Though you may find the thought of re-mortgaging intimidating, it could free up important funds, leaving you able to improve your life, so researching the options open to you is important to ensure that the best decision is made.