A remortgage is a business agreement that replaces your existing mortgage loan. It replaces the existing loan with a new loan from a different lender. The new lender pays off the existing mortgage debt owed to the original lender. The borrower is then left with just one payment,readjusted to terms agreed upon with the new lender.
Remortgaging is not to be equated to refinancing. Refinancing involves a new contract with the existing lender only: no new lender is involved. This may serve to lower interest rates, lower monthly payments and/or lower the total amount repaid on the mortgage.
Reasons for remortgages are numerous. Alternate lenders may offer better interest rates or monthly payments than a current mortgage lender is willing to provide. Remortgaging can serve to release equity as well.
This means that the borrower can obtain equity monies they have gained by remortgaging and borrowing more than the currently owed mortgage debt.
Remortgaging is a relatively simplistic process. It is a generally straightforward procedure. Application items include proof of income,expenditures, debts, and house valuation. Borrowers are generally required to pay the costs of the house appraisal actions andany legal fees necessary to perform the remortgage.Many lenders also charge a processing fee as well.
Most generally, a remortgage can be processed to completion is 4 to 6 weeks. There are some remortgage lenders that claim to be able to expedite the process and finish the whole deal in a week or less.
Only you or your financial advisor can determine the specifics of yourpotential remortgaging benefits. As with any serious financial assessment, take your time, cover all bases,talk
to several different lenders, and ensure that you are making a sound decision. The contract is long-binding, and definitely worthy of attentive deliberation. Take the time necessary to protect your home investment.
