If you are currently paying mortgage on your home and are wondering if there’s a way to lower your mortgage payments, then remortgaging may just be the option for you. The process involves switching from your current lender to another, one that can offer you a better deal.

Not only can you remortgage, but you can also remortgage on a regular basis to be able to save more on your house payments.

There are a few other benefits to remortgaging:

Find the best remortgage deals

The housing loan market has become more competitive in the last few years. More lenders are offering attractive interest rates to new homebuyers and existing homeowners. To find the best remortgage deal for you, the first thing you need to do is research on the market. Find the best rates on housing loans in your country. In most of Europe and some emerging economies in Asia, comparison tools help in making your search more thorough.

Once you find a new mortgage, calculate your potential savings as well as the costs involved when remortgaging. Usually, costs will include mortgage application fees, valuation fees, solicitor’s fees, and sometimes, a penalty fee charged by the existing lender for terminating the mortgage.

Before you call a new lender, try to find out first if your existing lender will be willing to match the better deal you have found. If not, then you can go and apply for a remortgage with the new lender you chose. Typically, a surveyor would need to revalue your property before you can finalize a new remortgaging offer. The whole process, from the research phase to signing the paperwork, can take from four to six weeks–sometimes longer.

Why remortgage?

The most obvious reason to remortgage is the opportunity to save money that a borrower would have otherwise used to pay for interest on a current mortgage. Often, remortgaging presents an attractive option for a housing loan which was taken when interest rates were higher. The smallest difference in interest rates can spell bigger savings over the entire period of your loan.

Remortgaging may also be an option if you wish to lower your monthly loan payments through extending your housing loan period. Loan extensions are often not designed to generate getting bigger savings but it is an alternative if you find yourself in a life-changing situation—an accident, an emergency—and you want to reduce mortgage payments to be able to channel the funds to other, more important things such as school tuition fees, housing renovations, and emergency expenses.

Remortgaging is also a good way to borrow more money or consolidate your debts, especially if you have a lot of those. Just as long as you make sure that you don’t default on your payments, it is easy to secure a remortgage.

There may be some scenarios when remortgaging is not exactly the best strategy. If, for instance, you only have two or three years left on your mortgage, or perhaps owe just a relatively small amount of money, then it might be more beneficial to stick to your current lender. It is best to determine whether the benefits outweigh the potential costs before you apply for a remortgage.

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