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How to Remortgage your Home
A remortgage is simply the process of replacing the existing mortgage on your home with a new one. There are a few different reasons that you would want to do this. The biggest reason is to save money, if interest rates have gone down since you took out your original mortgage you can save money remortgaging your home so that you get a lower rate. You may also want to think about a remortgage if you are currently on a variable rate mortgage and you think that rates are going to increase. It is usually a good idea to try to lock in a rate so that before the rates go up.
The other big reason that people will remortgage their homes is to take cash out of their equity. This comes with the obvious downside that you will now be paying your mortgage for a much longer time frame and that also means that you will be paying more in interest. On the positive side however is the fact that a remortgage is one of cheapest loans that you will ever take out. It may be a good idea to remortgage your home instead of taking out a higher interest loan for things like home improvements. It may also be a good idea to use a remortgage to pay off high interest loans like credit card debt.
How to Get the Best Remortgage Deal
If you are going to go to the trouble of remortgaging your home you are going to want to make sure that you get the best remortgage deal possible. Even a fraction of a percentage point difference on your interest rate is going to make a large difference over the term of the deal. There are all kinds of remortgage lenders out there so it pays to shop around and make sure that you are getting the lowest rate you can find. A remortgage broker can be a help here since he will usually be able to find the lenders who offer the lowest rate. A lot of people don't like to use a remortgage broker because of the cost, but if he can get you a lower interest rate it is well worth the expense.
One thing that you have to consider when you are looking at your remortgage options is any fees and penalties that you may have to pay. You can almost guarantee that there will be penalties for repaying your existing mortgage early. There will also be legal fees and probably other fees involved in taking out the remortgage. What seems like the best remortgage deal may not actually be after you have factored in the fees so you need to make sure that you keep that in mind.
Remortgage with Bad Credit
In a lot of cases the people looking to remortgage their homes have poor credit. Often they have run into financial difficulties and are looking to use the equity in their home in order to deal with other financial problems. Usually it is possible to remortgage with bad credit, the reason being that you are putting your home up as collateral. In general lenders think of a bad credit remortgage as a fairly safe loan since the risk of losing your home is a pretty big incentive to make your payments. If you are thinking about a bad credit remortgage you need to be absolutely sure that you are going to be able to pay your bills on time.
A remortgage with bad credit can often be arranged through a traditional lender but this is going to depend on how bad your credit actually is. If you have a real problem with your credit you may have to go to a lender how specializes in adverse credit remortgages. The downside here is that you won't get the best remortgage deal from these lenders and it is going to end up costing you more. However if you need a bad credit remortgage it may be your only option.
A Buy to Let Remortgage
There is another situation in which you may want to take out a remortgage and that is if you are buying property for investment purposes. Usually when you buy a house that you don't intend to live in yourself but rather to let out, you are normally required to pay a fairly high down payment. This seriously limits the ability of property investors to buy more than one house. In order to get around this you can take out a buy to let remortgage.
A buy to let remortgage will allow you to remortgage a property that you already own in order to fund the down payment to purchase another income property. The rules on this type of remortgage are a little bit different than they are for a standard remortgage so you will probably want to talk to a broker who specializes in buy to let remortgages. You will also likely need to talk to a lender who specializes in buy to let remortgages as well. Although they are sometimes offered by mainstream lenders they are still not all that common.
How to Get a Remortgage Quote
If you are going to do a remortgage deal you absolutely have to make sure that you are getting the best deal possible. That means that you need to compare remortgage rates in order to make sure that you aren't paying any more than you need to. Even small differences in interest add up. Fortunately the internet has made it very easy to get remortgage quotes online. There are plenty of websites that you can go to and get remortgage quotes from all kinds of different lenders. One thing that you do need to keep in mind is that these sites will likely only show you the remortgage rates of the lenders who pay them a commission. You are going to want to check out a few different sites to make sure that you are getting accurate information.
Another way that you can get remortgage quotes from a number of different lenders is to use a remortgage broker. A broker will be able to gather information on the remortgage rates of a number of different lenders and help to make sure that you get the best remortgage deal possible.