If you have been thinking that you could use a little extra money each month to make ends meet, to increase your level of savings or to enjoy other financial benefits, you may be wondering how you can increase your take home income.
Getting a new job with a higher salary may be one option, but getting a new, higher paying job is never guaranteed. Another idea is to reduce your expenses rather than increase your income. If you are like most people, your largest monthly expense is your mortgage, and this means that you could reasonably see the largest gain by remortgaging your home.
What is Remortgaging?
Remortgaging is when you take out a new mortgage on a property you already own. This can either be to replace your existing mortgage, to get an improved rate for example, or to borrow money against your property. This can be a convenient way of raising money by increasing the percentage of your home’s value that you borrow against.
How Remortgaging Could Save You Money
For those who still have a long time left on their mortgage, it can be in your interest to look around for a new supplier. Interest rates may be lower now than when you initially got your mortgage, or you may qualify for a better rate because of your improved credit rating. In these situations, it pays to looks around to see if you can get a better deal.
If you have been paying off your mortgage for many years you will have little left to pay however you may want to remortgage to raise money against your home. Remortgaging under these conditions means that any new monthly payments should be relatively manageable, and can result in interest rates and monthly payments that are more manageable than credit card repayments.
To work out if remortgaging will be a viable option for you, there are three components of a mortgage that you will have to consider. These are the loan amount, the interest rate and the loan term. You can use an online loan calculator to play around with the figures and see how changes in these different components will impact your mortgage payment.
How Much Can You Save?
Some people will be able to save a considerable amount of money each month through a remortgage, but even a modest savings can yield considerable gains over a long period of time. Keep in mind that a mortgage will last for up to 30 years, so any changes will impact your budget for years to come. You can get a better idea about how much money you could save by using a mortgage calculator today, but bear in mind that a mortgage professional will give you the final or actual figures that you are looking for.
Remortgaging may be just one of the many ways that you can reduce expenses, and it can seem like it may be the most time-consuming options available. After all, it may take only a few minutes to contact your mobile phone service provider to switch to a more affordable service plan. However, the mortgage payment may be fixed for up to 30 years in some cases, so this is long-term savings that you can enjoy.