Remortgaging vs Product Transfer… What’s the difference?
Remortgaging vs Product Transfer… What’s the difference?
Homeowners who want to change their mortgage often use remortgaging and product transfer. Both can help you get money out of your home but differ significantly.
Remortgaging or Product Transfer? Where do they differ?
When you remortgage, you replace your present mortgage with a new one from a different lender and get a new mortgage on the same house. Remortgaging can help if you want to lower your monthly payments, get money out of the equity in your home, or move to a better interest rate. Remortgaging could help you raise funds for home improvements or a special purchase. Still, you should carefully consider whether you can afford the additional payment throughout your mortgage.
On the other hand, a product transfer is when you switch from one mortgage product from the same lender to another. A further advance is a type of product transfer when you refinance or release funds from your current mortgage lender to borrow more. This can also result in cheaper monthly payments, but the significant difference is that you are not required to apply for a new mortgage. Both remortgaging and a further advance can help you get money, but how much you can get depends on several things, like the value of your home and how much wealth you’ve built.
But what about my money?
Before swapping or switching mortgage products, consider your finances and long-term goals. For example, finding a new mortgage with reasonable terms might be challenging if your credit score is low. Also, if your interest rate is variable, switching to a fixed rate can give you more security, but your monthly payments may go up.
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Refinancing to fix up your house
Refinancing, which covers remortgaging and taking out a second loan, can be a great way to pay for home improvements. By taking money out of your house, you can use it to make improvements like adding a new bathroom, making your kitchen more prominent, or installing a new heating system. This can raise the value of your house and make it more comfortable and save you money on energy costs.
Even though remortgaging and further advances can help you get money out of your home to make improvements, you should consider your financial situation and long-term goals before choosing.
Contact our financial advisors immediately if you want to discuss your choices.
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