What To Consider When Remortgaging Your House

Remortgaging your home at a lower interest rate comes with several advantageous aspects. Many people purchase a home with what they think are reasonable interest rates; however, many times as time goes by they see that interest rates have dropped. Remortgaging is a wonderful way to access and take advantage of a lower home interest rate. Many times the result of remortgaging leads to a lower monthly mortgage payment, as well as being able to consolidate other debts. Both lenders and brokers can help a person decide if it is best they proceed through a remortgage process.

Important Things to Consider

It is always important to keep in mind that a remortgage should be heavily evaluated and contemplated before completed; this is the key behind making a remortgage cost efficient. Thinking ahead often allows a debtor to secure a remortgage rate several months in advance. Being able to secure a rate in advance enables a debtor to stay ahead of potentially rising interest rates. Almost all lenders will advise debtors to think ahead at least 6 weeks when they want to secure a loan before one expires.

Plan Ahead

Being prepared and staying ahead of the market involves a great deal of research. This allows a person to find the absolute best interest rates to help them save money on a remortgage. Most times it is wise to consult with a broker and/or lender and follow their advice; after all, remortgaging is a daily part of their lives. There are many online websites that offer remortgage price comparisons, and these are very helpful tools to view when it comes to receiving an accurate idea as to whether a debtor should refinance.

Lowering the amount of a loan significantly helps the chance of securing a remortgage loan with a low interest rate. Many lenders will allow a debtor to pay off part of their existing mortgage with any savings or extra money they have on hand. Lower interest rates are almost always accompanied with loans that have a lower value.

Be Prepared and You’ll Be Fine

The remortgaging process is often confusing; however, being prepared is the key aspect at obtaining all the benefits it has to offer. Always think ahead, shop around for different available interest rates, and always try to lower your mortgage loan amount. Not only will remortgaging save you time and money, many times it can help bring you peace of mind.

There is no need to stress about remortgaging. The easiest way to see if you qualify for a remortgage is to talk to your lender. They can guide you through the complete process of a remortgage, and most times offer you helpful tips that will save you time and money when it comes to completing the process.

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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2 Comments

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  • That’s a tough situation, Patrick. My initial sense on this is that you should work with the situation that you have – and look for relief from the mortgage holder if available. Otherwise you’ll have a mess on your hands with regard to credit ratings, and who knows if you’ll be able to make a change to a different home (i.e., will you be able to get another mortgage?).

    Without knowing anything at all about the rest of your financial situation it’s nearly impossible to make a good recommendation for you. With that in mind, I suggest that you look over your complete financial picture and figure out a way to deal with your current situation, working your way out of the hole and making your move when you can get your head above water on the current loan. It’s not glamorous, and it’s not likely what you want to do, but it’s the prudent way to deal with the situation.

    Best wishes to you –

    jb

  • Hi Jim,
    I recently got married. My wife owns our town home, but owes substantially more than it is worth. We are debating whether or not its smarter to just walk away and purchase our new home in my name or if we should stick it out. Our residence is not our “dream home” so we would eventually like to buy something more suitable for raising a family.

    Thank you for your time

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