What Is A Remortgage Loan?
A remortgage loan is simply a new loan that replaces an existing mortgage. It can be obtained through your existing lender or you can use a different lender, depending on where you can find the best deal. As part of the remortgage process, your old mortgage will be paid off and you may even have the option to cash out some of your home equity.
Why Would I Want A Remortgage Loan?
There are a number of reasons why you may want a remortgage loan:
- To take advantage of a lower interest rate
- To pay for large expenses such as a child's education or wedding
- To pay for remodelling or expansion of your existing home
- To pay off other higher rate debts like credit cards or car loans
Remember that a remortgage loan is secured by your home, so it's important to make the payments on time and in full to maintain the loan in good standing.
Why Wouldn't I Want A Remortgage Loan?
In some situations, a remortgage loan might not be a good idea. For example, if it hasn't been very long since you obtained the mortgage or you got it at a very discounted rate you may face substantial penalties for early repayment. Or, if the balance on your existing loan is very small you may find that lenders are unwilling to underwrite a remortgage or that the fees they charge will be greater than the remortgage savings.
Another reason not to remortgage is if your employment has recently changed, especially if you are newly self-employed. Lenders want to be reasonably sure you’ll be able to repay the remortgage amount and they are often reluctant to lend to people with uncertain future incomes. However, some lenders specialize in these situations so do more investigation about your options.
Bad Credit Remortgages
If you have an adverse credit hstory or been refused credit in the past and you have a mortgage, it is possible to get quotes for bad credit remortgages in the UK via our online form. If you are a homeowner and you are seeking debt consolidation, adverse credit remortgages are normally the cheapest method of consolidating your existing debts into one loan.
How Do I Remortgage?
A good place to start is usually with your existing lender. They may have special offers or lower rates available for current customers who want to remortgage. You should also check out other lenders, though, because the remortgage marketplace is very competitive and there are lots of great rates available. Once you have selected a lender there are several steps that need to occur:
- The lender will want to know the value of your home, usually by having a professional appraiser inspect the property
- You will need to complete a loan application
- The lender will require conveyance work to secure a title report
- A solicitor will be engaged to ensure your previous lender is paid in full and to release any additional funds directly to you
How Much Does It Cost To Remortgage?
The cost of remortgaging varies from lender to lender, but in general it will probably cost less than when you first obtained a mortgage. Before deciding on a lender it's important to find out what the costs will be; many will waive certain fees or charge a substantially reduced rate. Also take into consideration if there is an early repayment penalty on the mortgage you're replacing, as this will add to the overall cost of the remortgage.
For many homeowners a remortgage loan is a smart option for lowering monthly costs, consolidating debts, or financing home improvements. The remortgage market is very competitive so research several different lenders to find the best deal for you.
Latest Remortgage News
- Re-Mortgaging – The How and Why
There comes a time in the life of most home owners when they stop and ponder on the wisdom of re-mortgaging. Hundreds of thousands of people do it every year. We look at why they do it and how to do it.
- For those with good credit, a mortgage in decent standing, and a relatively (depending on the bank's definition) sizeable difference between a home's worth and the balance of a mortgage, a home equity line of credit may be a good option for those needing a loan
It's very easy to sign mortgage papers and forget all about the details of the loan. As long as the monthly payments are made, many people don't give their mortgage much thought. However, as the economy fluctuates, mortgage rates do also, and substantial cost savings over the life of mortgage could be realized by refinancing.