Remortgages Can Be Done As Many Times As Possible As Long As It Saves Money

Category: Finance.

Remortgage is the process of paying off one mortgage with the proceeds from a fresh mortgage using the same property as collateral primarily to secure a more favorable interest rate from another lender.

Merely switching from one product to another with the same lender is not a remortgage but it is the removal of one legal charge over a property and its substitution with another from a new lender. The reasons for remortgaging may be many, like reducing the size of repayments, to raise capital or to consolidate other debts. People having a costly and unsuitable existing mortgage with a poor credit history can go in for remortgage thus getting a better interest rate and lower repayment than the existing one. Regular monitoring of the credit report and any improvements will give an indication of the most suitable time to apply for remortgage. This helps to save lot money over the term as well as on a monthly basis. Interest rates on bad credit remortgages are higher than average and vary from one lender to another. This can be achieved through online to save a lot of time, tension and energy.

Therefore it is advisable to compare a number of mortgage rates to find a suitable interest rate and payment. Sources that offer remortgage are banks, individual lenders and, building societies mortgage brokers. Remortgaging usually involves certain costs like application fee, solicitor s fee, redemption fee of, surveyor fees the older mortgage and broker fee. A wide variety of remortgage products are available like fixed rates, cash backs, capped rates, flexible, discounts etc. Whatever be the type of mortgage the buyer should be aware of the interest rate and the period in case of a fixed or capped rate. Annual percentage rates reflect the cost of the loan and helps in comparing different deals.

Variable rates vary over time and therefore in case of a discount, standard variable rate has to be paid. Remortgages can be done as many times as possible as long as it saves money. The basic difference between a remortgage and a refinance is that a remortgage is accepting a loan from a new lender where as a refinance can be provided by the existing lender or the new mortgage provider. In a remortgage, there are restrictions on the amount that can be had depending on the purpose for which it is intended. Mortgaging can also serve to release equity in the borrowers home, which is the difference between the market value of a home and the amount the borrower still owes. Although remortgage can be successfully accomplished in four to six weeks time, the duration may vary depending upon other lender and specific circumstances surrounding the property.

The procedure for obtaining a mortgage is fairly simple and the paper work involves proof of income, debts and expenditure.

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