To remortgage is being able to get another home through an existing mortgage. According to the Mortgage Shop “remortgage numbers keep rising with the highest remortgage transaction since July 2009 in the UK with 9 out of 10 UK mortgage applicants opting for the supper low fixed-rate mortgage deals.”
But now what happens when your debts are the cause of more financial problems? If you have a home, that may be a good way to start to alleviate your financial problems. Here are a few ways you can get a remortgage for debt consolidation.
Before you consider a remortgage, understand that you remortgaging will incur costs and fees just the same as your first mortgage. The process can take up to three years and should be budgeted for. Another factor to consider is how long you’re planning on living in your current home which will be remortgaged,at least it should be more than seven years or so equity can be built up again
How long have you lived in your house? If it's been more than 10 years, then you probably have built some equity through the years. You can be eligible for a remortgage. Importantly, try not to remortgage your house for more than 80% of its value as this may not be a good idea. A good idea is to get a Private Mortgage Insurance (PMI), this can help you pay your outstanding mortgage repayments when you default due to unforeseen circumstances.
The equity received should be used to consolidate your debts and payment for outstanding bills and utilities. The equity has a much lower interest compared to a personal loan, therefore it is a good alternative. With much lower interest rate on your credit, also providing you with a good amount of time to pay it back. Repayment of a remortgage will go towards the value of your home.
The shorter the payment period, the shorter you will have to pay in the long run.How quick your overall indebtedness will be reduced over the years allowing you to be mortgage-free, that could be a huge weight off your shoulders. If possible try to reduce to at least 5 years less than the remaining time on your present mortgage. This also saves you thousands of pounds from your interest repayments. So trying to keep the length of your remortgage as short as possible could be the best approach to remortgaging for debt consolidation.
Checking your credit score is a constant need. Your new interest rate will be based on your credit score. It’s important to check when the current or new debts start to affect your credit score. Checking your credit score is easy and you can constantly check it online from your major credit bureaus. Once you have received all your financial profile results from the bureau, make sure that they are accurate and up to date before you apply for a remortgage.
A way to increase your equity in your home is by remodeling or making an extension to your home, it is a good investment. This is a good idea because it is tax-deductible but please confirm with the latest tax relief policies. Or speak to one of our experts today.
We recommend waiting until you get at interest rate lower than on your current mortgage when remortgaging. Checking the interest rate will help you figure out the correct time for you to remortgage.
Get several quotes from our network of mortgage lenders for the perfect dealCompare quotes and let us help you choose the deal that best suits you Find the best remortgage quotes to pay off debts by visiting SmartMortgagesUK.com