Another reason to remortgage is in order to raise additional cash. Due to rapid rise in property values over past few years, many people now have mortgages which are well below their home's current value. The difference between property value and mortgage debt is known as equity. The majority of mortgage lenders will allow you to increase size of mortgage in order to tap into some of this equity. The cash raised can be used for a variety of purposes, such as home improvements, holidays, a new car, or consolidation of existing debts.

The advantage of borrowing money against your property is that rate will almost certainly be better than if you took out a personal loan, and because you can spread cost over remaining term of mortgage, repayments are lower.

Unlike moving house, arranging a remortgage can be surprisingly simple. There are no chains of buyers to worry about, so whole process can often be completed in a few weeks. The remortgaging process from start to finish normally lasts between 4-6 weeks.

In terms of costs there is no stamp duty to be paid, as you are not purchasing a property. Many lenders will pay some or all of your valuation and legal fees. In some cases there may be an arrangement fee or booking fee from new lender.

Whether to remortgage depends on interest rates. You always have to be sure that you can meet repayments whatever economic climate. There may also be redemption penalties on your existing mortgage and you will need to take these into account when assessing how much money you could save by remortgaging.

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Which one is better? It all depends on your personal situation. If you have had trouble in past with credit cards and revolving credit, a HELOC could be a very dangerous thing. Maxing out your HELOC has a lot more at stake than maxing out a typical credit card. So it is important that you have your finances and budget in place, prior to taking out such a loan. If your credit is poor, a HELOC may give you options where a traditional loan would not. Bottom line; understand your situation and you should have no trouble deciding right loan product for your needs.