Remortgage

To remortgage your  property has become increasingly popular due to the relatively straightforward and flexible process.  A summary of the remortgage procedure is shown below: 

A remortgage is precisely what the name implies, taking out a new mortgage to repay your existing one in order the release equity in your property or to gai a more competitive rate or many other reasons.  By taking out a remortgage you could even reduce your monthly payments. In simple terms a remortgage is when you transfer your mortgage agreement to another lender or gain better terms with your existing lender.  A remortgage  with a new lender will essentially mean that the new lender will pay the old mortgage provider the balance outstanding and you will continue to make your payments to the new lender.  By taking out a remortgage, you could save a considerable amount with your monthly repayments. 

However, before taking out a remortgage you should evaluate your current mortgage.  If you consider the interest rate to be too high and you are unable to negotiate a reduced rate with your current lender then a remortgage away from them to a better rate could save you money on your monthly payments. As well as paying off your existing mortgage, by taking out a remortgage you could obtain extra finance to fund anything from a house extension, new car, that much needed holiday and much more. 

To recap, a remortgage can be used to pay off your existing mortgage to acquire a lower interest rate as well as raising capital through releasing equity in your property.  If you have plenty of equity in your property (which means its market value is greater than the outstanding mortgage) you can increase the size of your mortgage. 

A remortgage is one of the least expensive types of loan on the market, so depending on your circumstances, a remortgage could be the next logical step forward.  Taking out a remortgage could be a cost saving exercise, not only by reducing the interest rate, but also by consolidating your existing debts. Therefore you will be reducing your overall outgoings each month into one affordable repayment. 

One of the other advantages of taking out a remortgage to raise capital is that the rate of interest will almost certainly be more competitive than if you took out a another type of loan.  Also you can spread the cost over the remaining term of the mortgage, so this could reduce your repayments even further.  Another advantage of a remortgage is that because you are not moving house, the procedure is much more straightforward because there are no chains of buyers involved and therefore the entire process can often be completed more quickly.  Also with a remortgage there is no stamp duty involved as you are not purchasing a property and many lenders will pay some or all of your valuation and legal fees.  However the lender may, in some cases, charge an arrangement fee. 

There may also be redemption penalties on your existing mortgage which should be taken into account when evaluating your financial requirements. Before taking out a remortgage always research the marketplace and always get comparison quotes from various lenders.