Accounting & Finance
Remortgaging: When is the best time?
Do you have one or more mortgages you’re paying off? And has your credit rating, your finances, or the value of your home gone up? Then consider remortgaging. It can save you a lot of money every year, release some of your equity as cash, and even lower your interest rates and payments. In short, it can be a better deal than what you currently have. So when is the best time to remortgage?
At the End of Your Fixed Term
Regardless of your reasons, when’s the best time to remortgage? It’s at the end of your term, of course, which is anywhere from 2 to 5 years. And as for the best time of year, quarter, or month, it’s usually at the end when lending officers are more cooperative.
Remember, they have monthly and quarterly targets to reach, especially if they work for a publicly listed company. And at the end of the year, they want to finish well and earn high bonuses.
When the Price of Your Home Goes Up
When the prices of the neighboring properties go up, even if it’s midway through your term, then it’s time to consider remortgaging. And the reason for this is obvious. As the price of your home increases, so does your equity.
What does this have to do with mortgages? Everything! For the most part, your mortgage depends on your equity. The higher the equity, the lower the interest rates and monthly payments. But there’s a catch. Remortgaging in between a term attracts a fee. Fortunately, with high equity, the benefits of doing so far outweigh the cost.
When You Need Cash
Is credit card debt weighing you down and needs to be repaid? Is an expensive wedding on the horizon? Or, is your child joining college soon and needs tuition fees? If this describes you, then it’s a high time you find out how to remortgage, and more so if your home has equity.
Remortgaging frees up some of your property value as cash, which you can then use in whichever way you please. However, take this step only as a last resort or if you need money for home improvements, which further increase the value of your property.
When You Want a Better Deal
Like most homeowners, you likely had limited finances when buying your first home. And without enough money, you had few options and little negotiating power over your final mortgage deal. As a result, you ended up with a variable-rate deal or with high-interest rates and monthly payments. Now your financial situation has improved and you want a better mortgage.
Then why don’t you remortgage? Shop around for a better deal about 3 months before the end of your mortgage term. When you get one, grab it. It could save you thousands of dollars a year while offering more predictable yet lower rates and payments.
Don’t be stuck with your current mortgage deal if you consider it unsuitable or if the value of your home has increased. Likewise, don’t fail to meet your financial obligations for lack of cash. Try remortgaging to get a better deal or much-needed cash.