Outlined below is a useful remortgages guide. Remortgaging has become increasingly popular due to relatively simple and flexible process. A remortgage is exactly as name suggests, taking out a new mortgage and repaying your existing one in order to realise equity and sometimes to reduce monthly payments.
Basically, a remortgage is when you transfer your existing mortgage agreement to another lender. A remortgage will mean that new lending company will pay old provider balance of amount outstanding and you will continue making your payments to new lending company.
Many people do not realise that they can simply pay off their current mortgage and take out a new one. By remortgaging your home, you could save significant amounts on your monthly payments.
Review your current mortgage. If you feel you are paying excessive rates of interest, compared to other lenders then a remortgage may save on your monthly payments. Alternatively, you may be looking for a way to finance an extension or purchase a new car, you could seek to increase your mortgage and take extra sum as cash.
A remortgage can be used for purpose of gaining lower interest rates on your mortgage or raising finance through releasing equity. Releasing equity is a good way of raising additional finance. If your home has positive equity - its market value is greater than outstanding mortgage - you can increase size of your mortgage.
A remortgage is a great way of saving money, as it is likely to lower your mortgage interest rates. A mortgage is also one of cheapest forms of loans around, so if you're looking to raise finance, it makes sense to remortgage your home.
There are various reasons why someone would remortgage. Quite often it is just a cost saving exercise to reduce monthly payment, although increasingly it is seen as a way of consolidating debts and reducing overall household outgoings each month.
One of most common reasons for remortgaging is to reduce costs. By switching to a lower interest rate you can either benefit from lower monthly repayments, or keep monthly repayments same, thus repaying loan quicker and reducing overall term of mortgage.