Remortgaging isn't always a great idea.
Here are a few times when it’s best to put your time to better use:
Your Mortgage affordability has changed:
This is when your credit score has gone down or your net income per month has fallen.It is always worth checking your credit file and following a strict pre mortgage guide before approaching a new lender so to avoid causing a more detrimental effect to your already bad credit score. It is worth following a few tips to get your credit score up before seeking a remortgage.Your mortgage affordability could have changed due to a few things such as new commitments e.g family, cars or maybe it’s that annual trip to Marbella. Whatever the case the lender no longer sees you worthy of a new loan. In any case, it might not be your situation has changed but rather the Lenders criteria have changed due to new regulation or economic factors.
Seeking a remortgage with negative equity isn’t really going to get you places.This can occur due to your house price dropping below the current value of your home.Unfortunately, in this case, you only have to ride out the storm.
If you don’t have enough equity in your current home then it might not be worth remortgaging as the LTV will not move significantly. In any case, it is worth plugging your mortgage details into a Mortgage management and switching service that currently monitors your mortgage and your current affordability to let you know if switching to a cheaper deal is worth the hassle.
Your exit fees and early repayment charge is high: This can be the case if you are on a fixed rate mortgage or have a mortgage with an introductory offer. In this case, there is little you can do but wait out the time frame where the charges apply.It is worth comparing the cost of remortgaging to the savings made to see if you have net savings. In this case, it totally depends on just how much the net savings are and if it’s worth your time. In this case, it is worth seeking a better deal or remortgage with your current lender. Just try not to get locked in for too long again…in case a better deal is around the corner from a different provider.
Your debt is too low:
Beleive it or not.Lenders have a baseline which they will not lend beneath. In the case, your debt is too low the fees incurred with remortgaging might be too much in comparison with a debt.
You are already on an excellent mortgage rate:
Well, this really speaks for itself. If you are already on the best rate possible then you can only wait for rates to go down. In any case, it is worth lugging your mortgage to a mortgage management and switching service to monitor and switch your deal when a cheaper one becomes available.
You can of course still go ahead with a remortgage disregarding the above but it is worth noting the true cost of a remortgage pror.