Remortgage – Isn’t It Time You Got A Better Deal?
If you have had your mortgage for some time, then it could be a good idea to get it out and look at it real good. Why? Simply because you may be able to get a much better deal. With interest rates changing every day, new loan options, and increasing equity on your house, means that many factors may now mean that you could reduce your mortgage payments each month, or more. Here is how you can determine if a better deal is possible for you.
Decide On Future Plans
Remortgaging your house may not be for everyone. This is especially true if you are thinking of moving in less than three years – or even five. The main reason for this is the cost of refinancing your mortgage. There will be some closing costs involved, so it will take you anywhere between one and three years to get this money back in order to break even. But if you are planning on staying more than that, you should do some serious thinking about a remortgage.
Check The Current Rate For Mortgages
The interest rates that are available for mortgages change every day – sometimes even more often than that. The important thing is that they are constantly changing – both up and down. By watching trends on the mortgage rates, and knowing your own rate of interest, you can see when the rates drop to more than 1% lower than what you have now. That is the time to refinance. Or, even better, if you see a slow downward trend, wait a few more days or a week or so, and it may even go lower. You will have to decide on the best time. You may also want to consider the advice of those who know the market and make predictions.
Get Better Terms
Since your financial situation may have changed over recent years, you may want to make some adjustments on your mortgage that reflects those changes. If you are doing financially better, then you can remortgage, get lower rates, and a shorter time for repayment. This will result in saving a lot of money overall and get you out of debt quicker.
If, on the other hand, your financial situation has not been so good lately, and you are feeling the pinch on your finances, then remortgaging could allow you to get lower monthly payments, your some of your equity, and stretch out the time period for repayment. A longer time period, however, may result in greater indebtedness.
Consider Getting Some Of Your Equity
One more thing. Getting a remortgage can also give you access to your equity – some or all of it. There are different types of mortgages that you can get in order to get what you want. Although the best way to reinvest your equity is to put it back into the house – at least some of it, it could also give you opportunity to do a debt consolidation, to buy a car or boat, or pay for medical bills or college. The choice belongs to you as to how you use it. When you use it on your house, it also becomes tax deductible, too.