If you’re a homeowner remortgaging can, if the right mortgage is found, improve your situation.
A remortgage is when you replace your existing mortgage with a new one. It can mean changing products with your existing lender, or switching to another mortgage lender completely. You should always get expert debt advice before going ahead with a remortgage.
There are 2 main ways that remortgaging can improve your situation:
- You can release the equity that’s in your property in a lump sum and use this to repay your debts
- It might reduce your monthly payment, freeing up money on a monthly basis to repay your debts
How remortgaging works
A mortgage lender will base your application on a number of things including:
- Your credit rating
- The value of your house
- How much you want to borrow
If you’re in arrears with your mortgage or any other debts, your credit rating will be affected and it’s unlikely that you’ll get a good mortgage offer.
If you’re currently on a mortgage deal that hasn’t ended, for example a fixed term for 3 years, there will probably be an early redemption fee to pay if you remortgage.
Things to think about before remortgaging
Remortgaging is something you need to consider carefully. It’s important to get as much information as possible before you make a decision. Some areas to consider are:
- What will the interest rate be?
- What term do I want?
- What will the new monthly payment be?
- What type of mortgage is best for me, fixed or variable?
- How much am I going to pay on fees for a remortgage?
- How will this improve my situation?
If you’re considering a remortgage, before you do anything else, you should speak to us. We’ll be able to assess your situation and see if there are any other options available to help you deal with your debts.
You can use our Online Debt Remedy tool or call our free Helpline on 0800 138 1111.