Remortgaging is when you replace your existing mortgage with a new one. Therefore, if you’re a homeowner, remortgaging can actually improve your situation, if you do however, find the right mortgage.
Remortgaging can also mean changing products with your existing lender, or switching to another mortgage lender completely. However, if you are considering a Remortgage in order to deal with your debts, you should always get an expert in debt advice before going ahead.
Remortgaging to pay off debt
There are two main ways that remortgaging can improve your situation:
One – You can release the equity which is in your property in a lump sum and use to repay your other debts.
Two – It might reduce your monthly mortgage payments, freeing up money to repay your other debts.
A Mortgage lender will base your application on a number of things, such as your credit file, the value of your house, and how much you want to borrow. If you’re in arrears with your mortgage or any other debts, your credit rating will have been affected, and its unlikely that you’ll get a good mortgage offer.
If the current homeowner’s mortgage deal hasn’t ended, for example a fixed term for three years, there’ll probably be an early redemption fee to pay if you Remortgage.
Is remortgaging right for you?
Remortgaging is something you need to really consider carefully. It’s important to get as much information as possible before you make a decision. Some areas to consider are the following, interest rates, the term that you want, what the new monthly payment will be, etc.
Getting advice to deal with debts while considering a Remortgage is a absolute must do, a debit advisor will be able to assess your situation and see if there are any other options available to help you deal with your debts.
Will I be able to Remortgage if I’m in debt?
Short answer, no! If you’ve missed payments for any of your debts it’s likely that your credit file will be affected. This may mean that you will find it hard to get a new mortgage with a good rate. However, Stephen Kerrigan, mortgage advisor in Doncaster may be able to identify suitable deals for you.