When not to Remortgage

Knowing when the right time to Remortgage can sometimes be tricky. 

 

You might have heard your friends talking about how they Remortgage the house and added a huge two-story extension, giving them the room they needed for their young family.

 

However, it's important to remember that everyone's circumstances are different and just because that worked for your friend, doesn't mean that it could be right thing for you too. 

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Little Equity

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If you owe your lender more than the property is worth, then you're in what they call 'negative equity'.

 

It can be difficult to Remortgage your house when you're in negative equity - unless you have separate funds to repay the difference.

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However, don't assume this is impossible.

 

Everyone's circumstances are different, just like every lender's criteria is different, so it's always worth speaking with our Mortgage Adviser to consider all your options. 

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Finances have dropped

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Lenders now have to see evidence of your income against your outgoings and carry out thorough credit checks.

 

So, if your income has dropped since you last took out your Mortgage (perhaps you only work part-time now or your partner has retired) the lender might be more cautious about lending you money. 

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Already on a low rate

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It might be the case that you're already on a low rate and you don't need to move to another one.

 

Perhaps at that moment in time, there is no better rate than the one you're on. 

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Large early repayment charges 

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If you pulled out of your current mortgage deal before the term is up, it could well come with a hefty early repayment charge which might make you think twice about switching.

 

However, some lenders might be willing to waive the charge if you’re sticking with them and are just moving to a new deal.

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If Remortgaging isn't the right option for you right now, then you might want to consider something called a product transfer.

 

This is where you stay with your current provider but you change your existing mortgage deal over to a new one that's more suitable for you. 

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By speaking to a mortgage adviser, you can find out more about your different remortgage options, to make sure you have all the facts before making a final decision that is right for you and your family. 

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