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What Can Remortgaging Do for You?

Aug 17, 2007
Remortgaging your home actually has a number of possibilities - some really good ones, too. Depending on your situation, it could enable you to do some things that you have wanted to do for a long time, and it could even save you thousands of dollars. Here are some of those great things that a new mortgage may be able to do for you.

Give You A Better Interest Rate

In order to remortgage your home and see real money saved - possibly tens of thousands of dollars, you need to wait until the interest rates on mortgages are around 1% or more lower than your present one. In order to know the best time, you will need to watch the market rates, and make sure that you are ready. It is also possible to pay some points to get a lower rate, too.

In the mean time, get a copy of your credit rating and make sure that everything reported is supposed to be there. Otherwise, you have time to make corrections. Since your actual interest rate is based on your credit score, take a little time to ensure that it is a good one.

Reduce Your Overall Indebtedness

A remortgage can help you to pay off that mortgage quicker and save even more money than just a lower interest will. If, instead of remortgaging for the same amount of time (for example 30 years), you reduce the payment time to about 15 years, then you will have even a much greater savings because of a shorter payment period. It will need to be a few years less than what you have left now to get this amount. Doing this, of course, depends on your financial ability to make slightly larger payments than you were before.

Get Access To Your Equity

When you get a remortgage, you have the opportunity to be able to tap into some of that equity that you home has built up over the years. You can do what you want with the money - even build an addition on your house, consolidate your debts, or take a long vacation. Money that you use to remodel or add on to your home is tax deductible, and adds value to your home. You will want to remortgage no more than 80% of the value of the house, though, in order to avoid taking out Personal Mortgage Insurance (PMI).

Any equity that you take out of the house gives you cash at a much lower rate of interest than you would have on a personal loan. It makes it ideal to pay off credit cards and other loans that have a higher interest rate - possibly much higher. This is what makes taking advantage of your equity when you remortgage such a good deal. You also have a longer time to pay the money back.

Before you remortgage your house, decide whether or not you are planning on living there for at least the next seven years. Because of closing costs, and possible early payoff fees, it will take about three years to pay off the costs of a remortgage. You should also be sure to look around and get several estimates. Then compare each one carefully to get the best deal.
About the Author
Joe Kenny writes for the Loans Store, offering re-mortgage offers, or view the latest remortgage with bad credit history at NationsFinance.co.uk.
Visit today: http://www.ukpersonalloanstore.co.uk/
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