Should you explore re-mortgaging your home?

Having taken a mortgage in the first instance to acquire your home and then being tied to servicing the instalments for this mortgage over an extended period of time, it would seem strange to even contemplate re-mortgaging your property, wouldn't it? There are many reasons to contemplate a re-mortgage of your property that are nonetheless worth considering.

Amongst the reasons for re-mortgaging include debt consolidation and in order to obtain better mortgage rates and pay less interest. As you may be aware, mortgage interest rates will vary over time and a mortgage taken a decade ago may be costing you more in interest than if you were to take the same mortgage today. As the financial services industry has become more competitive and more innovative in the products and services that are available, this has allowed individuals to gain access to better rates and better terms when taking a mortgage or in this case, a re-mortgage.

Consider then whether it may be viable to re-mortgage your property for the current amount that is outstanding on your loan. This means that you are not taking a mortgage for the original amount that you borrowed, nor are you taking a mortgage for the current value of the property (which should be higher than when you bought it). Instead you should explore re-mortgaging your property only for the current amount outstanding and stand a chance of extending the term of the mortgage or even reducing the interest rates that you are currently paying. The latter will clearly save you a substantial amount of money in the longer-term, depending on how many years there are left to pay your original mortgage.

Alternatively, if you feel that you are in a position to consolidate your debt, whether it is credit card debt (which by the way incurs high rates of interest that are compounded monthly) or to pay off your car instalments or even to take a much needed and well deserved holiday with the family, perhaps a re-mortgage can help you achieve this, without having to cough up a huge amount of money upfront. If you opt to re-mortgage in order to consolidate your finances, it will basically mean that you will be making payment to one lender instead of a multitude of lenders that you may be doing now.

Before making this decision however you may need to re-examine your mortgage agreement. You will have to check whether there are any penalty clauses imposing penalties on you for shifting lenders. While such penalties exist, they are only applicable in the early years of the mortgage therefore if you have already been paying this particular mortgage for more than 5 years, chances are you are free and clear to re-mortgage your property.

If you have earnestly read this article, and options are jumping into your mind about how you can consolidate your finances or even pay for your child's university education, then perhaps time has come to pick up a phone and call a re-mortgage lender. Compare the different rates available and consider whether a re-mortgage may be the best decision you have made since you acquired your home.

For more information on re-mortgage lenders and re-mortgage quotes, visit www.kpmfinancialservices.co.uk to get the best services in town!