A remortgage is how you pay off your existing mortgage with the proceeds from a new mortgage using the same property as security. Remortgaging is very common in the UK, as usually the purpose of swapping mortgage lenders is to get a better interest rate or more favourable terms, such as a long term fixed rate where you have peace of mind that your payments will not go up, but of course they wont go down either.
Remortgaging does not involve moving home or taking out a second mortgage on the property, it is in effect the transfer of a mortgage from one lender to another. Homeowners may choose to remortgage for various reasons, usually to reduce the overall monthly mortgage payment amounts. Other reasons may include to reduce the size of repayments, to pay off a mortgage earlier, to raise capital, or to consolidate other more expensive short term debts, however this can lead to the total to repaid increasing.
Homeowners often mis-use the expression remortgage when they are simply switching from one product to another with the same lender; this is not a remortgage which involves the removal of one legal charge over a property and its substitution with another in favour of a new lender.
The ability to remortgage is very much based on an individual's circumstances and as the costs involved can be expensive, so it is always best to take advice from a suitably qualified individual such as the advisers at Mortgage Maze.
Think carefully before securing other debts against your home. your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secutred on it. If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
Mortgage Maze is a trading style of Charles Frank Finance Ltd. Charles Frank Finance Ltd is authorised and regulated by the Financial Conduct Authority. See https://register.fca.org.uk - FCA number 624668. Our Data Protection Registration is Z2962200.
There may be occasions when the firm charges a fee. This is dependant upon your circumstances, but it will normally be no more than 1% payable on completion.