The average UK household could save £400 per year by remortgaging according to new research by Norton Finance.
UK house prices increased by 10 per cent in the year to November 2021 and total unsecured consumer debt across the UK is now at £197.9 billion, which works out at £7,119 per household on average, of which £2,058 is credit card debt.
However, in just 21 days, UK homeowners could set themselves up to save £400 every year by remortgaging, says the independent finance broker. This would empower borrowers to combine expensive debt into cheaper packages and means the average household could save over 20 per cent on debt repayments.
What is remortgaging?
Remortgaging allows a borrower to take a new loan based on the current value of their house. When property prices are high, as they are at the moment, it’s often possible to borrow more than the original mortgage.
Norton Finance explained: “The most organised borrowers with strong credit scores have been completing applications within 21 days this year.”
It added: “Remortgaging is no longer taboo, it can be a really prudent way to streamline your outgoings. Leveraging your home, usually your biggest asset, can make a substantial difference to your monthly outgoings, especially if you have loans, credit cards or other more expensive unsecured debt.”
Five ways to speed things along
- Check your credit score. Is there anything you can do to improve it before making your application?
- Analyse your financial position. Tot up all your debt, review the APRs
- Determine how much you’d like to borrow and use an online calculator like this one from Norton Finance to give a quick indication of how much you might be able to borrow
- Gather your paperwork including mortgage documents, credit agreements as well as having information to hand such as property value and type, and employment and income details
- Make yourself available to your broker – most of the delays surrounding mortgage applications come from solicitor availability, so if you are available when they are, the process can be made much faster
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Paul Stringer, Norton Finance, said: “When homeowners come to us looking for remortgage policies, it’s a sensible time to take stock of more expensive debt like credit cards and loans, and consolidate everything into one new mortgage to save money on total repayments. Either that, or they tend to add to the amount borrowed to make improvements to increase the value of their homes.”
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