There are many different reasons as to why a homeowner may look to take out a remortgage in Nottingham. You can find lots of information about this on both our website and across the internet, whilst you are researching this option.
From remortgaging to release equity, to taking out a remortgage for home improvements, there are plenty of options out there for homeowners. One that people maybe don’t talk about enough though, is that you can actually remortgage in Nottingham to extend your term.
Yes, that’s correct, you may be able to remortgage in Nottingham and extend the length of your mortgage term!
Why would I remortgage in Nottingham to extend my term?
Your term is how long you have to pay back your mortgage, based on the contract you signed with a mortgage lender. Popular choices are usually around 25-30 years, which is a long time to be financially liable for something, though also provides long-term security.
Once you get through part of your process, maintaining your payments might be difficult, perhaps your bills have risen. In taking out a remortgage to extend your term, you spread the cost of your mortgage over a longer term, lowering your monthly mortgage payments.
This in turn can then free up much more disposable income that you can use per month. It’s not sunshine and rainbows, however, as the downside is that your interest will be spread across that extended mortgage term as well.
What this means, is that whilst it will be cheaper in the short term, giving you that extra disposable income per month, you will actually be spending more on your mortgage overall by the time your term has finished.
Can I remortgage in Nottingham to extend my term if I’m borrowing more money?
Yes, you may be able to look at extending your term if you would like to borrow additional funds or remortgage to release some equity that is in your home.
Truthfully, you can probably extend your term on any remortgage path you’re looking to take, with popular options for homeowners being to remortgage home improvements or to take out a debt consolidation remortgage in Nottingham.
It is again important to remember though, whilst you will be extending your term over a longer period of time so you can lower your monthly mortgage repayments, you will be paying more interest overall by the time your term has finished.
You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
When wouldn’t I be able to remortgage in Nottingham and extend my term?
Though there may be variances from mortgage lender to mortgage lender, there are lots of factors that could potentially limit your ability to remortgage in Nottingham and extend your term. These include, but are not limited to, your age, mortgage type and any mortgage debts.
If this doesn’t work for you, please remember that there may still be options to help you lower your monthly mortgage payments. Your dedicated mortgage advisor in Nottingham will review your case, and look for the most appropriate outcome to help you.
Can I remortgage in Nottingham to extend the term of my interest-only mortgage?
This can be a little complex, as not many mortgage lenders will give you the option of extending the term of your interest-only mortgage. Some may not have an issue with this, though you will still owe the lump sum of interest once your term concludes and they may want to avoid payment delays.
Additionally, the majority of residential properties will be on some variation of a repayment mortgage, as a residential interest-only is much less frequently occurred in modern times. Instead, it is much more common to find an interest-only attached to a buy to let property.
This in itself with have its own challenges, as not only will you have the same problems of paying back the lump-sum, but a mortgage lender might not allow you to extend your term if the property still has a tenant living inside of it.
In any situation, your best route may be to look at taking out a remortgage on your property, so that you can replace your interest-only mortgage with a repayment mortgage. This would allow you to continue by paying back both the capital and interest combined.
We would absolutely recommend speaking to an expert member of our remortgage advice team, so that you can better understand the options that may be available to you, prior to making any decisions.
What if I want to reduce my term instead?
Perhaps you actually wish to reduce your term instead, which once again can also apply to pretty much every mortgage situation. In this circumstance, quite the opposite to extending your term, you would pay back much less overall, though would likely have much higher monthly payments.
Alternatives to extending your term
Rather than taking out a remortgage so that you can extend your term, you may actually have other options out there available to you, if you would like to go the route of saving money per month. In this article, we have already looked at remortgaging, but what about downsizing?
Downsizing means that you sell your current home, and move into a smaller home instead. As a general rule, a smaller home could cost less, reducing the need for a big mortgage, which in turn could have lower monthly mortgage repayments if taken over the same term.
Another option, for homeowners over the age of 55, with a property that is worth at least £70,000, is equity release in Nottingham. This could allow you to release funds tax-free from your home, either as a lump-sum or in occasional payments, through a lifetime mortgage.
Even then, equity release in Nottingham might not be the most suitable path for you to take. There are also options for homeowners over the age of 50, such as retirement interest-only mortgages and term interest-only mortgages, known as RIO’s and TIO’s.
Similar to how it would work when taking out an equity release plan, with a RIO or TIO, your loan will only be repaid when you are dead or have moved into long-term care, with your home being sold at either stage.
A professional, trusted and dedicated later life mortgage advisor in Nottingham will be able to review your possible options and alternatives as a later life homeowner, advising on the most appropriate path to take, based on what you wish to achieve, as well as your future plans.
To understand the features and risks of equity release and lifetime mortgages, ask for a personalised illustration.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.
Date Last Edited: November 24, 2023
