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Can I Remortgage Early After Buying A Property?

REMORTGAGING | 10.03.2022

It is generally considered uncommon to remortgage soon after buying a property. However in some instances it may be necessary for your financial situation to release funds, consolidate debts or try and reduce your monthly mortgage payments by moving to a better deal. However early application does have it’s disadvantages which should be considered before remortgaging.

Why May You Want To Remortgage Early?

There are several reasons why you may want to remortgage early. For the most part those interested in remortgaging soon after purchasing their property are looking to generate funds. For example:  
  • For home improvement projects or repairs. Borrowing more by remortgaging will release equity from your property in order to fund these projects. 
  • Alternatively you may be looking to consolidate your debts into one lower monthly payment. 
  • Or you may be eager to remortgage early if you were lent the money to buy your property by a family member or friend and are keen to repay them. 
  • Or perhaps if you purchased your property at auction with cash and are wanting to release funds in order to begin your next project. 
 

The Disadvantages Of Remortgaging Early

  Whatever your circumstances for remortgaging before your mortgage term ends it is important to watch out for early repayment charges. It is possible that if you switch to a better mortgage deal that you may make enough savings in the long run to outweigh the cost of early repayment charges.  However, these charges whilst generally between 1-5% of your loan can still be fairly steep, a £200,000 loan for example could have a 1% repayment charge of £2,000. They are often put in place to deter people looking to chase cheaper interest rates. It is best to seek the advice of a mortgage advisor in order to weigh up your options and determine what would be the best for you.   

How Soon Can You Remortgage To Release Equity?

  Most lenders will allow you to remortgage after a period of 6 months has passed from when you purchased your property. There are some instances such as if the value of your mortgage is low compared to the value of your property, in which some lenders may be more lenient with this time frame. Allowing you to remortgage earlier.  For the most part however,  6 months is the earliest you are able to remortgage and move onto a new deal. If you are looking to release equity from your home it is likely you will not be able to until this period is up.    It is worth noting that waiting longer than the 6 month period may lead to better remortgage deals along with better equity options, if you’re looking to raise larger funds from your property it may be best to consider this and determine if you are able to wait longer for a more preferable deal.  If you have used a credit card to make home improvements and are considering remortgaging early inorder to collate those debts you should take into account that your lender will be especially cautious with your application.  If remortgaging early is something you are considering but you are unsure as to whether this is the best option for you, seek the advice of one of our experts. Call us on 0345 305 2540 or contact a member of our team here.
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