Remortgage

Bright Oak can guide you to experienced regulated mortgage brokers who will help you to release equity to pay off debts.

Contact us to find out if it’s the best option for you.

Introduction

Homeowners may be able to release equity that they hold in their home to pay off other debts. This can be accomplished via a remortgage.

In other circumstances using an expert mortgage broker may allow you to reduce the cost of your monthly mortgage payment. This would help you to manage your other debt repayments.

Remortgages can be a cheaper source of borrowing than other types of loans (such as credit cards) and therefore this option appeals to many people. Consideration should be given to the fact that previously “unsecured” loans would become “secured” if using this option. A failure to keep up repayments in the future could therefore result in you losing your home.

Who Can Remortgage?

Any homeowner with “equity” (i.e. a home worth more than the existing mortgage plus any other loans secured on it) may be able to remortgage.

This is a serious decision and guidance should be taken from an experienced and regulated mortgage broker. This will preferably be a mortgage broker with experience in obtaining the best deal for clients who may have current or previous debt issues. We would recommend you choose a broker with access to the whole mortgage market, rather than a company employed broker with only a limited number of products to offer you. Contact us to find an appropriate mortgage broker for you.

How Does a Remortgage Work?

We strongly advise anyone considering a remortgage should contact an independent mortgage broker.

They will look into your current mortgage arrangements to make sure you will not be subject to exit penalties that make remortgaging unworthwhile.

The broker will conduct a fact-find exercise with you to learn more about you, your personal and financial circumstances, and your attitudes to various matters that are important to the type of remortgage that you may choose to take out.

Based on the considerable information gathered, a good mortgage broker will scan the whole mortgage market to find a mortgage that meets your needs, requirements, and attitudes. The best product will be recommended to you.

Fees and Costs

A mortgage broker may get paid in two different ways.

The lender who supplies the mortgage will pay the broker a commission based on the size of the loan.

In addition a mortgage broker may charge you a fee for their work and expenses in securing the best mortgage deal for you. Most frequently this fee can be added to the mortgage itself rather than paid out of your current funds.

Summary of Remortgage Advantages

• Typically the lowest interest rates available compared to other types of borrowing.
• Equity released can be used to pay off debts releasing the pressure from you.
• Repayments can be spread over a longer period, reducing the monthly cost.
• You might be able to reduce your current monthly mortgage repayment.
• Creditors might be prepared to accept a lump sum (less than the amount you owe) in full and final settlement of all debts. Bright Oak could help negotiate such an arrangement on your behalf.

Potential Remortgage Disadvantages

• Securing debts on you home could result in losing your home if you become unable to keep up repayments. Always consult an expert debt adviser or mortgage broker before making this decision as other options such as an IVA might be more suitable.
• Mortgages are typically put in place for many years. Even with lower interest rates you may end up paying more interest overall.
• Self-control is required to avoid the temptation to once again build up unsecured debts (after the previous debts have been cleared by the remortgage).

Remortgage right for you? Contact us to find out if a remortgage releasing equity to pay off debts is the best option for you.