PAYING FOR A LIFE EVENT THROUGH REMORTGAGING
Have you got an expensive life event coming up that may require a loan?
Have you considered remortgaging?
Getting a loan or paying for something on a credit card is all well and good, but if you are wanting to borrow a substantial amount of money, what does this mean for you in the long run?
An interest free credit card is great, until the interest actually kicks in.
What if you want to borrow £30,000?
The interest on this sum is not going to be pretty.
The average British wedding is now approximately £30,000, but do you want to be worrying about high interest on your special day?
Say your current property is worth £350,000. If you were to remortgage, you could borrow £30,000 and take a new mortgage out for £380,000.
This could then add to your new repayment plan, and it’s almost like this out of sight out of mind money situation; which overall, is quite ideal when paying for a big life event.
Before you consider this step, you need to ask yourself if remortgaging is right for you.
It’s quite a big decision to make and not one that should be done without care.
By remortgaging your home, you are basically increasing your debt in the long run, and therefore will have to pay more back going forward.
Obviously this all goes without saying, and something like your dream wedding can make it all worthwhile.
But there are always pros and cons to consider in this situation.
You firstly need to ensure that your property actually has equity to take out. If not, by speaking to a financial advisor you can review your options and alternative methods.
If your property has gone up in value, you’ve paid a good amount on your current mortgage and you have equity in your property, then you are onto a winner.
The higher the market value and the more equity, the more eligible you are for the most competitive rates. This could actually mean you end up paying less in monthly payments then you are now.
Even though in the long run you end up paying back more, for the time being your monthly rate could be at a reduced cost.
If you have a big life event like a wedding or honeymoon to consider, then having reduced living costs could be ideal for you.
Therefore, remortgaging for a life event is definitely something to consider when speaking
to your financial advisor.
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.