Would
Refinancing Be Worth It?
Refinancing can be worthwhile, but it does not make good financial
sense for everyone. A general role of thumb is that refinancing becomes
worth your while if the current interest rate on your mortgage is
1-2 percentage points higher than the prevailing market rate. 2% is
generally accepted as the safe margin when balancing the costs of
refinancing a mortgage against the savings.
There
are other considerations, too, such as how long you plan to stay in
the house. Most sources say that it takes at least three years to
realize fully the savings from a lower interest rate, given the costs
of the refinancing. (Depending on your loan amount and the particular
circumstances, however, you might choose to refinance a loan that
is only 1.5 percentage points higher than the current rate. You may
even
find you could recoup the refinancing costs in a shorter time.)
Refinancing
can be a good idea for homeowners who:
* want to get out of a high interest rate loan to take advantage of
lower rates. This is a good idea only if they intend to stay in the
house long enough to make the additional fees worthwhile.
* have an variable-rate mortgage and want a fixed-rate loan to have
the certainty of knowing exactly what the mortgage payment will be
for the life of the loan.
* want to convert to a variable rate with a lower interest rate or
more protective features (such as a better rate and payment caps)
than the variable rate they currently have.
* want to build up equity more quickly by converting to a loan with
a shorter term.
* want to draw on the equity built up in their house to get cash for
a major purchase or for their children's education.
How
to apply for a remortgage
There
are so many remortgage deals available from high street lenders and
sub prime lenders, it is difficult to choose the right one for you.
Mortgage brokers can provide you with all the advice you need to attain
the best deal for your circumstances. Fill out the form on the right
to be contacted by a broker that will help you...
What the broker will offer you:
- Quick and Friendly Service
- Low Flat Rate Fee
- Advice and recommendation of suitable mortgage products
- Always deal with the same person, not a robot.
- Talk to someone who understands your needs
- A mortgage with your best interest in mind
- Access to a range of exclusive products
- In house solicitors
- Fully qualified mortgage advisors
- Regulated by the Financial Services Authority
