Capital raising is one of the most common reasons for a remortgage. It is not just about saving money or trying to reduce your monthly repayments. There are times in most of our lives when we need access to money. It can be planned, like starting a family or needing to expand the current property, or something unexpected, like a major leak that has caused damage to the property or needing a new car, that puts us in a situation where we need to raise some capital. Remortgaging can be one option to look at if you find yourself in this position. If you get the right deal, then you could end up with the capital you need as well as a much better deal than you had before.
Depending on the reason and the amount of additional money you need, personal loans or credit cards can help in the short term. However, on bigger projects, like complex or unexpected home improvements such as extensions; or when we are looking to consolidate existing debts on credit cards, that we need access to a large amount of money over a longer-term. In these situations, short-term borrowing might not be an option. When this is the case, investigating what deals are out there can be key to helping you get the capital you need to help.
You need to be aware of your existing mortgage and what it means with them if you are looking at a remortgage. If you are still in a tie-in period with your current lender, which would be more likely if you are in the first few years of a mortgage and want to remortgage then you will be essentially asking to break the tie-in deal early. Where this happens, the existing lender will probably be looking at an early repayment charge to recoup some of the interest that they will be losing out on.
With any mortgage, including remortgaging, you also need to be aware that your home may be repossessed if you do not keep up with the repayments on your mortgage. You will need to make sure you can afford the new mortgage. If you are moving from a fixed-rate mortgage to a standard variable rate mortgage, then you should understand that changing interest rates will affect the amount you pay each month on your mortgage payments, they are not a set amount like fixed rate mortgages. While the capital you raise can help you out, you really need to make sure you can pay the new monthly amounts.
We are a mortgage broker and Insurance advisor registered in England. We deal with a network of mortgage lenders so can get you several options and deals to remortgage, we will discuss with you if it is even the best option for you. Our network of lenders is authorised and regulated by the Financial Conduct Authority. So, if you need mortgage advice or if you have any questions about remortgaging, then speak to an appointed representative at identityfs