When is the Right Time to Consider Re-Mortgaging?
With the market in its current state there has never been a more important time to get investing in property exactly right. Get it wrong at the moment and you could lose a fortune. Get it right and you could be one of the few people to make money out of a recession. While President Obama brings on economic minds like Charles E Phillips to help reverse the crisis, those left in real estate are picking up the pieces. That’s why if you are thinking about getting into property investment it is a good time to sort out some rules as to how to proceed:
There are individuals and families out there who will get themselves all set with their mortgage and then never think about it again. For such people re-mortgaging will be unnecessary. They will most likely remain with their same mortgage provider for the entirety of their mortgage, happy not to rock the boat for the next twenty years. On the other hand, there are also plenty of homeowners out there who prefer to regularly chop and change in order to ensure that they are always able to take advantage of the best deals on the market and consequently re-mortgage often.
The process of going through a re-mortgage essentially means you either get a different mortgage package from your current same lender, or you change to a new lender completely. Either option is relatively simple and it is just a case of finding the best deals. The market for re-mortgages is extremely competitive, (even in the current economic climate), which means good news for the canny consumer. Because they want your business so much they will always compete hard to get you to swap over to them. Take advantage of this.
Many people decide to re-mortgage because they are coming to the end of a two or three year deal or special mortgage rate and are about to revert to the standard variable rate of mortgage which they do not want to do. So, once they near the end of that deal they arrange to jump ship immediately to an equal or better deal, with a rate fixed for two to five years at something they can live with.
Alternatively, you might want to re-mortgage because you have multiple debts and would like to clear them in one go. Re-mortgaging allows you to take a small amount of equity out of your property to spend on something or to pay off debts. Releasing money like this clears all high interest debts into one easy to repay, low-interest payment, significantly reducing all your usual monthly outgoings.
Regardless of your reasons, and whoever you get the mortgage with, it is important to remember to get your accountant or lawyer to go through the deal with you and to be clear about all the charges or fees you will be liable for with your new deal. Once you have added these up and calculated the new monthly repayments you will have an idea about how much the mortgage will save you.
James is a business blogger and writer, who writes about everything from business equipment to business technology and from contractor tax to setting up an umbrella company.