Remortgages

Remortages or refinancing are where a homeowner takes out a new mortgage loan from the bank to pay of the original mortgage, using the house/home to secure against the loan.

The term "remortgage" is mainly used in the UK, although it is used elsewhere. The majority of remortgages are taken out to pay off older mortgages with a new, more favourable interest rate mortgage.

Generally the remortgaging process is carried out by a secondary bank or other credit institute. The actual process does not entail moving home or obtaining a second mortgage on the property, the main concern is to gain better interest rates an move the mortgage lender to a different one.

Remortgages are taken out for various reasons, including:

• Repayment reduction - reduce monthly payments
• To pay off a mortgage early
• Raise money for other projects or needs
• Debt Consolidation

The word remortgage is sometimes misconstrued, when the homeowner switches products within its original lenders bank, then this is not a remortgage, it is simply a change in product.

The most common types of remortgages are:

• Fixed Rate Remortgages
• Discount Rate Remortgages
• Capped Rate Remortgages
• Flexible Remortgages
• Tracker Remortgages
• Bad Credit Remortgages
• Shared Appreciation Remortgage
• Equity Release Remortgage

Almost anyone who owns a property can take out a remortgage as long as the sum to be paid on the remortgage is coverred by the property price.

For homeowners under financial pressure, remortgaging can help to cover the original mortgage and any other debts that have accumulated over time. This procedure helps in keeping monthly costs down to one single affordable payment.

Always consult a broker or lender before taking out a remortgage on your home. Failure in paying back your mortgeg generally ends up in loosing your property.

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