The mortgage journey can come with its ups and downs, however, it can be fulfilling. Going through the process turn into one of the following positive outcomes:

  • You are now settled in your dream property, and are maybe looking to start a family.
  • A step up to progressing further up the property ladder.
  • Getting an extra income through an investment purchase

Whatever route you go down, in the future, you will eventually come to the end of your mortgage term. You can either sell up and upsize/downsize into a new property.

Remortgage is a popular option for customers who are looking to sell their portfolio to the tenant or another buyer and look at other opportunities.

What Is Remortgage?

In the case where you use the proceeds from a new mortgage to pay off a pre-existing mortgage, this is a Remortgage. It can be beneficial when you are looking to find lower interest rates and better mortgage terms.

With the 20 years or so experience with Malcolm Davidson (Director / Mortgage Advisor), we felt it would be helpful to collate all the options you can choose from when it comes to taking out a Remortgage and create a guide.

Remortgage for Better Interest Rates

Typically, your initial mortgage deal will usually last 2-5 years and include low fixed rate or possibly discounted rates. You might get placed on a tracker mortgage which means your mortgage will follow the Bank of England’s base rate.

It’s likely you will get moved along to the lenders Standard Variable Rate (SVR) as soon as your term ends. This type of mortgage has an interest rate that can fluctuate because it depends on what the lender wishes to charge.

Unlike a tracker mortgage, this doesn’t follow the Bank of England’s base rate. Many choose to look at Remortgaging for better rates to save money on their monthly payments due because SVR and tracker mortgages are a more expensive route to choose.

Remortgage for Home Improvements

You might find that 2-5 years into occupying your home that something isn’t quite right. It could be you are wanting an extra room/larger living space for your kids/belongings, a new kitchen, a new office or loft conversion.

Instead of moving into a larger house, it might be best you look into advice in order to release equity so you can fund any renovation costs. Obtaining planning permission and funding can seem like a nerve-wracking concept, however, it can be a less stressful option compared to finding a new home.

Furthermore, it can reap rewards when going through the process of a development in your current home and can pay off in the future with a potential increase in the value of the property if you look to sell up or rent out in the future because of the expansion of space.

Remortgage for Changes to Your Term

Another reason why some may look into Remortgage in Halifax is for a better mortgage term through reducing the length or switching to a more flexible product.

Even though reducing the size of your term can mean you aren’t tied down to your term for as long, it does mean your monthly repayments will be a lot higher. The longer your term, the lower the payments will be over time.

In some cases, you might look into getting a better mortgage term by looking into a more flexible mortgage term when they remortgage. This option can be appealing to many homeowners because of the benefits like having the option to overpay.

Furthermore, homeowners also have the ability to move the same mortgage and rates over to another property if they decide to move at any point in the future. As mentioned, you are able to overpay which means you can pay off your mortgage as quickly as you’d like.

Despite a flexible mortgage sounding a lot more appealing, they usually come in the form of a tracker mortgage. Again, this type of mortgage follows the Bank of England base rate which means your payments may change depending on interest, this can make them a little unreliable.

Remortgage to Release Equity

There is a level of equity in everyone’s properties. This is summed up by finding out the difference between the remaining total on the mortgage, and the current value of the property.

As mentioned previously, you do have the choice to use the equity to fund home improvements, however, there is a number of options out there for you.

Other options you could use the equity to cover long-term care costs, so cover their income, to pay off an interest-only mortgage, or to have free spending money.

Sometimes, Buy to Let landlords will use a remortgage to release equity so they can cover their deposit for buying another property in the future as an addition to their portfolio.

For homeowners who are aged 55+, with a property worth at least £70,000, it may be beneficial to take a look at your options for Equity Release in Halifax. Speak to a trusted later life mortgage advisor to learn more about later life lending.

Remortgage to Consolidate Debt

Using a remortgage to release equity in order to pay off any unsecured debts that you may have accumulated over time is a more popular options people go for.

Debt Consolidation is based on your credit rating as well as amount on how much you’re entitled to and the value of the property. Furthermore, this could result in the limitation of the amount you can have.

In order to pay off your previous mortgage and your debts, it’s required that you borrow more than your outstanding mortgage amount. Either way, your monthly repayments will most likely be higher.

As much as this isn’t the most perfect situation, it’s very helpful that the option is out there should an unfortunate situation arises.

There is options out there is you do have a significantly damaged credit rating, however, this situation will not be as simple. Therefore, it’s important that you seek Specialist Remortgage Advice in Halifax before progressing.

Even doing this doesn’t mean it’s guaranteed. Before consolidating and securing any debts again your home, you must seek Mortgage Advice in Halifax.

Experienced Mortgage Advisors in Halifax – Get in Touch Today

If you are coming to the end of your term and are wanting to look into the option available for Remortgaging, get in touch with an open and honest Mortgage Broker in Halifax.

Having an advisor by your side can allow you to discuss your situation and future in order to get the best plan of action when going forward on your mortgage journey. We always work hard to make this process quick and smooth.

Date Last Edited: January 15, 2024