Many people remortgage to gain funds to carry out home improvement work to their property. This is often seen as a sensible option, as any improvements you make to your home may well increase its value in the long term. Spending in this way is therefore an investment in your property as you will likely see a return on it at some future date.
There are many reasons why people choose to remortgage some are:
- Your current fixed rate is ending
- Obtain a better interest rate
- Pay off debt
- Home Improvements
- Extend your home
- Changes to their financial situation
- Change from interest only to repayment
- Equity release
If you have come to the end of your fixed rate your mortgage will revert to the lenders Standard Variable Rate [SVR]. The SVR might higher than other lenders rates on the market as there are large variations between lenders and this if it were to run to the end of the mortgage term can cost thousands of pounds in extra payments.
This failure to switch earns lenders a considerable amount in extra interest, which in the main is avoidable if at that point you shop around for a better deal. While there is a cost to remortgaging, with regard to lender and solicitor fees, many lenders offer to pay these costs for you.
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