Remortgaging | Is it a good idea?

On this page, we'll explore and provide more information on what Remortgaging is, and what it involves. We'll also examine the pros and cons of property remortgaging and discuss whether remortgaging is a good idea or not and take a look at the alternatives that may be available to you. Finally, we provide details of how Shire Direct can help when it comes to providing a suitable Remortgaging solution for you!

Table of Contents:

What is Remortgaging?

Before we proceed any further it's probably a good idea to explain exactly what remortgaging is.

Remortgaging is the term used when you swap your existing mortgage for a new mortgage scheme altogether, and will usually be with a different mortgage lender.

In the main, remortgaging is a very straightforward paper transaction, and can bring considerable benefits to the borrower, depending on why you have decided to switch your mortgage, and we'll take a closer look at the potential benefits and drawbacks in a moment or two.

Is Remortgaging a good idea or not?

The answer is, as ever, "it depends"!

It depends on your circumstances, needs and aspirations, and what alternatives may be available to you.

To get a clearer picture of whether remortgaging your home may be a good idea for you, or whether an alternative solution may be more appropriate, let's take a look at the potential advantages, disadvantages and alternatives to remortgaging. Remember, if you're unsure, why not get in touch, we're just a free telephone call away and would love to be able to help!

Why remortgaging might be a good idea! A look at Remortgaging advantages

The benefits of remortgaging can certainly include:

Remortgaging is an uncomplicated paper transaction.
You don't have to move house to move your mortgage!
If you are currently paying your lender's standard variable rate (SVR), it's highly likely that you could save money by taking advantage of a "special deal" with another lender, for example a preferential fixed rate, or discount rate perhaps.
Remortgaging allows you to raise money for almost any purpose.
Remortgaging also provides you with the ability to refinance all your existing borrowings, and this is called debt consolidation. It's one of the ways in which you can bring a hard-pressed budget back into the realms of affordability! Just think how much easier life would be if you could repay all your existing credit commitments, such as credit and store cards, bank loans, HP etc., into one new mortgage loan. Simply jot-down your present monthly debt commitments, and see how much we can cut your monthly outlay by!
By remortgaging, you will usually be eligible to borrow at very competitive rates of interest compared with those being charged on your credit cards and loan transactions - remember, you can't usually borrow money cheaper than that on mortgage. So it can make sense to make your bricks and mortar work for you!
Remortgaging can give you the means to raise cash to improve and extend your home, so if you love your house, your friends, and the area where you live - but you need a bit more room, moving house might not be the best idea.
Remortgaging could provide the additional funds you need to give your home a facelift - another room, conservatory, a new fitted kitchen or replacement windows. So, if you have more children than bedrooms, remortgaging might just be the solution, without having the upheaval and expense of buying a new property.
By remortgaging you don't incur Stamp Duty.

However, there can be drawbacks to remortgaging too, and we'll take a look at the potential downsides to remortgaging next.

The potential disadvantages of Remortgaging

So, as you can plainly see above, there are plenty of beneficial aspects to remortgaging, which may well beg the question 'What are the disadvantages of Remortgaging?'.

Well, as with most things in life, there are good points, and not so good points! Unfortunately remortgaging is no exception, there are things that you should be aware of:

If you are using the remortgage funds to repay other unsecured credit transactions, such as credit and store cards, HP or loans:
- you will be converting unsecured debt into secured debt and the inability to meet your repayments on your new mortgage could result in you losing your home.
- although you will be cutting your outlay each month, usually at a lower interest rate, it's likely that you will be extending the term over which you will repay the original borrowings, and therefore the total interest you will repay will be more than if you had kept to a shorter repayment term.
You might incur early repayment charges if you are currently in a tie-in period with your existing mortgage, as well as some of the other costs associated with remortgaging, such as fees that are likely to be charged by solicitors, broker and valuer. However, these charges can often be set-off against the savings on your new mortgage payments.

Remortgaging alternatives

So you might now be wondering if there are any other ways of raising money, or lowering your monthly outlay apart from by remortgaging?

Well, yes there are. And you can be certain our professionally qualified Advisors will explore these alternatives with you.

Your options may include, one or a combination of any of the following

Raising additional funds by means of a further advance from your present lender, although it's not always possible, because of:
- their lending policy, or
- because your payment history with them has been less than perfect, or
- perhaps you have changed employment status since you took out the original mortgage with them, or
- you may need to borrow more than they are prepared to lend you at the loan to valuation you can offer.
- they may keep their best rates "for new customers only"!
Raising funds by way of a secured loan (also known as Homeowner Loans). This can be useful in circumstances where:
- Large early repayment charges (ERC's) are payable due to a lock-in clause on your existing mortgage, or
- The interest rate is preferential to the rate at which you would qualify by remortgaging
An unsecured loan, but this will depend on the amount you are looking to raise as most unsecured loan products have a somewhat restrictive repayment period of 5-7 years maximum. Some unsecured products can also be inflexible and expensive.
Borrowing from a friend or family, although this can often be difficult to broach, and it's likely that you want to keep your financial affairs private!
For those in serious financial difficulty, it may be prudent to approach the credit card or loan provider to see if they will accept reduced payments, the Citizens Advice Bureau is an excellent agency, and may assist you with this.
In the worse case scenario, it may be appropriate to consider an Individual Voluntary Arrangement (IVA), or even personal bankruptcy, and if you feel this is necessary we can refer you to professional debt councillors.

I'm in interested in Remortgaging and would like to have my circumstances checked out - can Shire Direct help?

Yes of course, that's a good idea!

A no obligation chat with one of our professionally qualified mortgage advisors will usually clarify the options available to you, in a jargon-free language that you can understand! Naturally, we'll carefully assess your circumstances, needs and aspirations, and come up with just the right solution for you!

You'll find our approach to be friendly, helpful and professional. And hopefully, like the vast majority of our customers, you'll be impressed and delighted with our personal and attentive service. We're confident that you'll find us approachable and not in the slightest bit stuffy!

So if you are interested in remortgaging to restructure your finances, or fix your interest rate, or perhaps raising cash to carry out some home improvements, or simply to get rid of the nagging bank manager - then why not give us a call on Freephone 08000 282 281. Our lines are open until 10.00pm daily, including the weekends. The call is free and without obligation and we'd love to hear from you! Alternatively, you can also enquire online at any time, we'll be happy to help in any way we can!

Enquire Online now, or call us today 08000 282 281 - our freephone lines are open 8am-10pm everyday! We'd love to hear from you!

The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.

There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.

THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Adding existing debt to your mortgage will increase the repayment term and overall cost.

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Remortgaging, is it a good idea?A look at remortgaging, possible alternatives, and help available from Shire Direct!