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Is It A Good Idea To Remortgage Your Home

By Edited Oct 1, 2016 0 0

There are plenty of good reasons to think about remortgaging your home . It is often one of the best financial decisions that you will ever make, there are a lot of advantages to a remortgage deal. The advantages can be lowering your interest rate to save you money or using the equity in your home to cover other expenses. Generally speaking your home is the biggest asset you have and a remortgage can be an excellent way to get the most out of that asset.

Given the benefits it is surprising how few people actually remortgage their homes. Often this is because they are unaware of the advantages of remortgaging. Some people are simple unaware that the option even exists or think that it may a difficult and complicated process. It is actually a very simple and straight forward process and is often one of the best financial decisions you can make.

A remortgage is no more complicated than getting a new mortgage to replace your existing one. Since you have equity in your home this one will be far easier to qualify for than the original mortgage was. The goal is to arrange a remortgage that has an interest rate that is lower than the one you are currently paying. Given the level interest rates are currently at this shouldn't be too difficult. Reducing the interest rate will not only save you money over the long term it will also reduce your monthly payment freeing up cash for other things.

Interest is far and away the largest cost of owning a home, even more expensive than the actual home itself. Over the course of most mortgages the cost of the interest will be more than three times the actual cost of the home. It really adds up and any reduction in interest that you are paying can result in huge savings. If your mortgage has a variable rate it is always a good idea to lock in fixed rate any time interest rates fall. This may raise your interest rate in the short term but you will be better off in long run since interest rates will almost certainly go up.

The other great thing about a remortgage is that it is probably the lowest interest loan you will ever qualify for. This makes it a great idea to remortgage your home to take some of the equity out of your home and use it to pay off high interest loans, like credit cards. The savings will be huge, especially if you have a lot of high interest debt.



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