With the threat of Brexit quickly creeping up on the UK, many homeowners are asking “what will happen to the property market in 2019”? However, there is another question that homeowners should be asking themselves and that is “should I remortgage my property this year?”. And, the answer is a pretty simple one. Yes, you should definitely be considering this.
Zing Mortgages have created this short guide to help you understand the many benefits of remortgaging your home and why you should take the step in 2019.
According to a recent study by Virgin Money, there are three-quarters of a million mortgages due to mature in the UK in the first half of this year alone. Furthermore, they found that there are almost 185,000 households that will be looking into re-mortgaging for the first time, which is a 10% increase in the first half of the same period last year. This gives mortgage brokers like us the opportunity to provide our customers with better rates and more options.
If your current plan is a fixed-rate or tracker mortgage and its introductory period is drawing to an end, then it’s a good idea to remortgage before you are automatically transferred onto your current lender’s Standard Variable Rate, which will cost you a great deal more on your monthly repayments.
Remortgaging your home can allow you to release some of the equity (cash) that you have built up since taking out the initial deal. Maybe you are looking to make some home improvements or go on the trip of a lifetime. If so, remortgaging your property can be a great way in order to raise the money. However, before increasing your debt further, it is essential that you take professional advice together with doing your own research.
The most suitable mortgage for you is one that best matches your personal and financial circumstances, both of which can change over time. Maybe you would like to move onto a longer fixed term to secure a rate or you’re in the position to make some overpayments each month.
If you’re on a repayment mortgage, over time, the amount of money you owe your lender will fall and the amount of equity you have on your property will rise. House prices have also risen over the last few years which means, naturally, your loan-to-value ratio would have gone down (which is great news for you!). If when you took your original mortgage out you were on a high loan-to-value product/rate, chances are you will be paying a higher monthly payment, as the risk factor to the lender is increased the higher the LTV is.
Taking into consideration you’ve been paying monthly repayments and an increase in house prices, chances are your LTV ratio would have dropped, potentially putting you into a lower bracket. And, with the lower LTV bracket, comes lower monthly interest payments to match the lower risk you pose to the lender. This is something definitely to consider and a great reason to re-mortgage onto a product.
It is crucial to do your research before applying for a remortgage as you may need to wait until the end of your redemption date to make monthly savings. However, do be aware that the remortgaging process can take between 1-2 months to complete, so you would want to get an application submitted and a new mortgage ready to go a few months before this date to ensure you are not pushed onto your lender’s Standard Variable Rate. So, Zing Mortgages recommend that if you are looking to remortgage your property then it’s better to get the ball rolling sooner rather than later.
At Zing, we are here to help you find the right mortgage for you. Our experienced team of advisors and mortgage brokers can assist you in finding a mortgage to help ease the process. As an independent mortgage broker, we are more than happy to provide you with free and impartial advice about applying for a remortgage. So, why not visit our contact page today or call us at 0332 414 113.