DavidA remortgage is where you take out a new mortgage on your home to replace an older one. It’s called ‘re-‘ because it’s replacing the old one.
Why would you want to do this? There are many reasons why people remortgage their homes, but they usually fall into one of these categories:
To pay off an existing mortgage loan and take out a new one with better terms
To release equity in order to raise money for renovations or other purposes (this is often known as ‘equity release’)
To take advantage of lower interest rates when the current mortgage rate is higher than the current market rate
Change your mortgage product. If you have an interest-only mortgage and want to switch to a repayment mortgage, for example, a remortgage could be your best option. This is because interest-only mortgages are usually only available through specialist lenders, so there’s no guarantee that the same lender will offer you a repayment deal if you decide to switch.
Shift your mortgage balance from one property to another. A remortgage can help if you want to move house but don’t have enough money in savings for the deposit on both homes. For example, if you own two properties worth £200,000 each and want to move into a bigger home worth £300,000 but don’t have enough cash for the deposit on both properties, it’s possible that you could use two separate mortgages together with a remortgage to fund the cost of both homes (provided they’re bought within 90 days of each other).
To release cash from your home – remortgaging can enable homeowners to access money they wouldn’t otherwise be able to raise because they don’t want to sell their property or they can’t sell it quickly enough. This might be useful if they want to make improvements or extend their home without having to wait until they’ve saved up enough money for these projects. Remortgaging also enables people who are struggling financially (for whatever reason) to reduce their monthly payments temporarily until they are back on track with their finances again.
The remortgage process is very similar to a first time purchase, but instead of buying a property for the first time, you’re looking to replace your existing mortgage.
As well as being able to borrow a larger amount, it’s also possible to get better rates and terms on your new mortgage. This can be particularly useful if you feel like your current deal is no longer meeting your needs.
However, there are some things that need to be considered before remortgaging. It’s important to make sure that you’re aware of the differences between remortgages and first time buy-to-let mortgages as well as how they differ from an equity release scheme. The remortgage process is very similar to a first time purchase, but instead of buying a property for the first time, you’re looking to replace your existing mortgage.
As well as being able to borrow a larger amount, it’s also possible to get better rates and terms on your new mortgage. This can be particularly useful if you feel like your current deal is no longer meeting your needs.
However, there are some things that need to be considered before remortgaging. It’s important to make sure that you’re aware of the differences between remortgages and first time buy-to-let mortgages as well as how they differ from an equity release scheme. You can contact https://themortgageadviceclinic.co.uk/ for more information.