| Remortgage is also known as refinance. It is the | | | | However, be careful when selecting a new mortgage |
| process of settling one mortgage with the proceeds of | | | | with a low interest rate, as the price you may have to |
| a new mortgage by offering the same property as | | | | pay in the future for the lender's initial generosity could |
| security. It is the process of transfer of the mortgage | | | | be early redemption charges applied to the new loan. It |
| from one lender to another lender. This is may be | | | | may cost you next to nothing to change your |
| done to get a better rate of interest. Other reasons | | | | mortgage if your current loan has no Early |
| for remortgage may be to reduce the length of | | | | Redemption Charges. |
| repayments, raise additional capital etc. There are | | | | In a fiercely competitive market, nearly every lender is |
| many lenders available in the market and is very | | | | keen to attract remortgage business. Most lenders |
| competitive. Several online lenders are also available. | | | | compete to provide the best remortgage deals. They |
| To smoothen the process of switchover, many | | | | are prepared to offer a range of deep discounts, low |
| lenders offer free valuation and waiver of legal fees | | | | fixed and competitive capped rates which match up to |
| etc. Normally, the process takes one month to | | | | the deals they offer home buyers in order to attract |
| complete. While considering remortgage, the fee | | | | mortgage customers. It is easy to believe that the |
| associated with remortgage such as legal fees, | | | | grass is greener and switch to a new lender offering |
| valuation fees, arrangement fees, solicitor fees, dead | | | | low rates and the promise of tip top customer service. |
| release fees, early redemption fees, mortgage | | | | Traditionally, remortgage were associated with debt |
| indemnity guarantee etc. must be taken into account, | | | | consolidation - the re-organization of a messy state of |
| as these will increase the cost of mortgage. | | | | financial affairs, rather than a sensible and proactive |
| Home-owners have to select the best remortgage | | | | way to make more money. More and more people |
| quote taking into account the above fees. Some | | | | are still attracted to sorting their finances out and |
| lenders may waive some of the above fees. | | | | transferring debts with high rates of interest to a home |
| However, persons with good credit will get lower | | | | loan, since a mortgage is the cheapest way to borrow |
| interest rates compared to persons with bad credit. | | | | as the monthly payments for your remortgage are |
| Some institutions charge early penalty fee for prior | | | | less than the total outgoings paid on the separate |
| closure of remortgage. So it is always better to take a | | | | debts. Remortgage are for longer period whereas |
| loan based on your financial position. It is very important | | | | loans are for short period, hence the repayments on |
| to work out the redemption cost carefully, before | | | | remortgages considerably more than separate loans. |
| switch over to remortgage. It may make sense to wait | | | | These aspects must also be taken into consideration |
| until the ERC period has passed before switch over. | | | | while applying remortgage. |