Most likely, most people know that interest rates have been going up. Those who have mortgages with fixed rates don't really care. But if you have a mortgage with an adjustable rate, your payments may have already gone up. Since these can go up a lot, now might be a good time to think about getting a remortgage. Here are a few ways to do it.
Adjustable rate mortgages are the best way to get lower payments, or at least they used to be the best way. The problem is that they only work for a certain amount of time. Even though your payments are set at the beginning, you can't do better. But when it comes to the part that can be changed, the economy of today can make it a real nightmare.
About the only thing you can do is get a new mortgage. The better off you will be, the faster you get it. You can always refinance again if the economy gets better in the future.
The best time to get a new mortgage is when the rate you have now is at least 1% lower than what you could get with a new one. But it's possible that all you need to do to keep the house is get a new fixed-rate mortgage. If so, you should act right away. With a fixed-rate mortgage, one way to lower the amount you have to pay each month is to make the mortgage last longer. Even though the payments will be lower, the total amount you pay will be higher in the long run. However, it will be cheaper than an adjustable rate if rates don't go down. Think about remortgaging again in the future.
The next thing you should do is get some quotes online. This is easy to do, and a single website can give you more than one quote. Still, you need to go to more than one and get more than one quote. Then compare them carefully and choose the one that will work best for you. You should know, though, that a mortgage with a fixed rate is usually more expensive than one with an adjustable rate. So you could get a bigger house, you probably chose an adjustable rate.
When you look at the quotes, you'll know two things: if a fixed-rate remortgage is within your budget and if you're going to stay in that house. Even though that sounds pretty bad, you probably already know what is going on with interest rates. You already know what the bills are.
If you like the sound of the new payments, you should think about whether you can make them for at least three years. This is how long it will take to get back the costs of the remortgage, which are like closing costs again. So, if you think you might not want to stay that long, it's not for you.
Lastly, figure out how much equity you currently have in the house. With it, you might be able to consolidate your debt, which could make remortgaging even more worthwhile.
