Should You Remortgage Your House To Make Big purchases Or Pay Off Debts?

A house is the most expensive thing that most of us will ever buy. But lots of people don’t consider using the money tied up in their properties to help with the other big expenses in life. But if you are in a position to do so, you can remortgage your house to release equity.

So is it worth doing this? The answer will depend on your financial situation, how much you would like to borrow, and how you want to use the lump sum. You should also take into account that interest rates may increase if you borrow more, and you will spend longer paying back your mortgage.

With the average wedding costing around £15,000, many couples who are already living together may want to borrow this money against their properties. Or perhaps you have retired and only have a small mortgage, but want to help pay for a relative’s big day. Consider the remortgage deals available before deciding whether to borrow the money for your dream wedding.

Another common reason for remortgaging your home is to pay for education, be it yours or your children’s. School fees and university tuition fees can be costly, especially for more than one child. While deciding whether to remortgage, look into other loans and grants available, as these may be better value.

If you have large credit card debt, or other debts like personal loans or car loans, you may be able to consolidate these into one lump sum and add it to your mortgage. Whether this is worth doing depends on the level of your debt and how well you are managing it.

If you are paying off a lot of different debts each month, then you could reduce your monthly outgoings by adding them to your mortgage, depending on the rates you are offered. The disadvantage is that you may end up paying more in the long run by spreading the debts over a longer term.

Many people remortgage in order to borrow money to improve their properties. You may want to put in new central heating or new windows, or install a new kitchen or bathroom suite. Or perhaps you want to convert the loft into another bedroom. In any case, consider the cost of the renovations, and get realistic estimates of the value they will add to your home.

Remortgaging for all the above reasons – and more – was common in the past, but in the current economic climate borrowers and lenders are often more cautious. However, remortgaging is still a realistic option for many home owners – it all depends on individual financial circumstances, the remortgage deals available, and of course interest rates.

If you need money for a large purchase, or if you want to consolidate your debts, then remortgaging could help you. But remember, you will end up with a bigger mortgage that will take longer to pay off. So weigh up the pros and cons carefully before making the final decision.

James McHeggins currently writes for JustRemortgages.com a top UK based website for all the latest remortgage rates and the best remortgage deals