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Wednesday, January 28, 2009

Ten Questions to Ask Yourself Before You Remortgage Your Home

By Chad Copp

It may be difficult to tell whether right now is the best time to remortgage. It may be a bad time to remortgage or remortgaging could be the step that saves you from financial ruin. If you want to know whether or not now is the time to remortgage, you are going to have to answer these 10 questions.

1. How good is my credit? Knowing where you stand when you want to remortgage your house as far as your credit goes is going to give you an idea of what type of interest rate you are going to get on a new mortgage. If your credit isn't that great, you may want to wait until it gets better to consider remortgaging.

2. How much in interest are you paying now? If the current interest rate is only a half of a percent or a percent lower, you might want to wait to refinance until you can save more money. Make sure that this process is worth it and that you are saving the most money possible. By waiting, you are going to be able to see if you can remortgage at the lowest interest rates possible.

3. What's the current rate of interest that banks are offering? There's a current rate of interest that's pretty much standard with all remortgage companies, so you are going to want to find out what that is and figure out how much money a remortgage could save you every month in your bills.

4. What are the remortgaging fees? Each bank or mortgage company has fees that are associated with remortgaging and keeping these fees in mind is going to help you decide whether to remortgage now. Before you sign your mortgage papers, be sure to look through them with a fine tooth comb to see whether or not there are any hidden fees in there.

5. How many years are left on your current mortgage? If there are only a handful of years left on your current mortgage, you might just want to pay it off as soon as possible. Ask yourself what is better: paying off your home quickly or paying it off with a lower interest rate. By remortgaging, you won't be able to pay your house off quicker, just with less interest.

6. Are you planning on relocating? If your job is going to send you to another location soon, remortgaging is not going to be the best move right now. Just keep on paying off your mortgage and when you move, you can find a mortgage that has a better interest rate.

7. Is the family happy? If you are going to get a divorce (or get married) in the near future, you are going to want to wait to remortgage your house. Remortgaging is expensive and not a fun thing to do, so you don't want to do it more often than you have to. Do it only when you have to.

8. How long has this been on your mind? People often see advertisements and get swept away with the notion of how great it would be to remortgage without realizing that it is a lot of work.

9. Is your schedule clear? Remortgaging is a headache and is going to eat away at your free time. If your schedule isn't clear, choose a different time to remortgage.

10. What do the banks say? There is usually no obligation in going and talking to banks, so you might want to see whether or not testing the water and talking to a couple of banks is going to benefit you. You may decide after talking to a couple of banks that remortgaging is not for you and that is totally fine.

Remortgaging is going to be a hassle to do, and what is even more confusing is that it isn't always crystal clear when you should and shouldn't go through this headache. After you ask yourself all of these 10 questions, you should be able to see whether remortgaging is a smart move.

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