When you have substantial equity, such as a house, that you could base your borrowing on, it is seriously tempting to re-mortgage. But ask yourself this. If you didn’t have the money for a bigger mortgage before, how come you do now? And do you honestly, really have the money now?
As enticing as re-mortgaging may be, it inevitably leads to either increasing your monthly expenses or a longer term mortgage. Have you created a budget with your proposed higher monthly repayments and did it honestly reveal you can afford to keep up with the premiums?
If you are looking at a longer term, do you honestly not care you will have a mortgage at seventy years old? Will that mean you will need to work until you are seventy? How do you feel about retiring so late in life? Or worse yet, will you still be paying off your mortgage at 80? Do you have insurance to cover should the worst happen and you die before the term is up? Are you happy to sell your house and downsize for retirement?
These are all questions that not only need to be asked but answered in detail well before any re-mortgage is arranged.
My advice? Avoid re-mortgaging at all costs.
Do you own a house or apartment? Would you consider re-mortgaging? Under what circumstances? If you have already re-mortgaged what advice would you offer to those now considering re-mortgaging? Please share your thoughts in the comments below to gain encouragement, support and insight from our community, we’d love to hear from you.