Remortgage Choices Can Be Rewarding

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Remortgage Choices Can Be Rewarding

remortgageRemortgage is a word that is often heard when it comes to things that involve money and properties and quite possibly debt .

Some people consider it as a type of insurance while some look at it as a venue for saving money.

Even though these general definitions really fall into the actual meaning of the word, remortgage has a more comprehensive connotation.

So what is remortgage? Basically, it is used when someone has replaced his present mortgage with a new one.

That could be with either a new mortgage plan from their present lender or a new one from a different lender.

Remortgage involves a lot of papers and people need to have an already existing mortgage in order to have one.

However, if remortgage means replacing the present mortgage with a new one, then why would people want to do this?

There are actually a few reasons for a remortgage. The first of these is because it’s a good way to save money.

Technically, a borrower is paying for the standard viable rate of their lender. By having a remortgage, borrowers can save thousands on their interest charges once they switch to a more competitive deal.

Remortgage Is Just A Term For Refinancing

Due to occasional surges, or surges in property values, that happen from time to time, a lot of homeowners have received unexpected fortunes from the abrupt increases in the property market.

By having a remortgage and therefore refinancing, these increases in one’s personal fortune can be used to pay other things like personal loans, unsecured borrowings, or credit cards.

Also, if the interests of the said things are consolidated into one monthly remortgage repayment; a person is also saved from paying expensive interest rates.

Changing this type of loan at the appropiate time can prove very useful, and fulfilling when it comes to improving a certain property.

For those who want to expand their current property, as opposed to purchasing a different one because they do not want to move to a new location, they can turn to remortgage in order to get the additional funds needed to add one room, a conservatory, or even a new kitchen to the current property.

Probably the most important function of a remortgage, however, is that it helps in ensuring that repayment of the mortgage is really possible at the end of a mortgage term.

There are a lot of people who are experiencing unsuccessful endowment mortgages.

By having a remortgage, they can switch to a capital repayment mortgage that can give them the advantage of having a new fixed discount rate or a mortgage product which is 10% cashback payable.

A remortgage is useful for:

  • those who want to extend their properties
  • those who want to increase the value of their homes
  • people who want to lessen their monthly outgoings
  • those who want to raise cash
  • people who want to improve their rates of mortgage or fix their mortgage payments

 

When juggling, or changing a current loan, or several, one

must still be careful though because it can also cause some disadvantages if not done properly.

Some of the possible troubles  could be:

– having greater interest charges
– incurring of Early Repayment Charges
– losing a property if repayments are not kept up

So, it goes without saying – before committing to something like this.

It is very important to have a deep understanding of the consequences of any financial transaction and thus avoiding any possible negative outcomes.

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