When and How Should you Go for Remortgage?

By: Ben Estevan

Replacing the current mortgage with a new package is known as remortgage. The main idea behind this is to chase the chance of more favourable repayment terms and conditions. When you find that switching over to a new deal will bring you advantages that your current mortgage deal does not offer, you can go for a remortgage. The process of switching over to a new deal is not so cumbersome.

You can go for a remortgage even without changing your lender. If your existing lender is capable of offering you a better package then there is no necessity of shifting to another one. However, elaborate research is necessary to see whether or not the deal offered by the existing lender is the best. Accepting any remortgage offer offhand may not serve your purpose; rather it may take you to further trouble.

Therefore, it is recommendable to explore the market thoroughly and go for some smart shopping. Lenders offer quotes on demand. So, you can take quotes from some of the famous lenders. Then compare them with each other. While comparing remortgage packages, prime importance should be given to interest rate. In fact, interest rate reflects the major cost of a mortgage package.

So, do your maths well and find out the deal that can save you money on interest. Then consider the repayment terms like monthly instalments and repayment period etc. Another important thing to be taken care of is the early repayment cost. The repayment terms of your present mortgage may dictate you to shell out some money to your existing lender if you go for a remortgage.

Include this early repayment penalty with the interest and other cost of the deal. You may have to pay property evaluation cost and other some minor fees attached with the processing of the remortgage deal. When you add up all these expenditure, subtract it from the cost of the present mortgage. If you find the new deal will offer you better advantages then you can safely go for the remortgage.

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