Remortgaging is basically a process that allows a person to switch the current mortgage from the existing lender to some new lender. Remortgage or the fresh mortgage repays the existing lender and at the same time provides the borrower with an opportunity to raise supplementary funds at lower rates of interest than the existing mortgage. Remortgaging is in fact a wonderful option for those who wish to lessen their monthly payments, raise ample amount of capital or release equity in their house.
These days, people are remortgaging their homes as it allows them to get hold of better interest rates. There are innumerable benefits of remortgaging.
If any borrower had taken a loan when the interests were high then he or she can save money by switching to lower interests or remortgaging.
If the borrower is paying the lender's SVR (Standard Variable Rate), then it is apt to change the existing deal to a better available product. This allows the borrower not only to save money on the monthly payments but also to repay the mortgage in lesser time. It is good if the better deal can be done with the existing dealer but if the current lender does not agree to offer better rates then the borrower can easily switch the mortgage to some other lender. In doing so the borrower may have to pay early repayment charges to the current lender but it worth paying these charges in order to gain net savings.
With a little search the borrowers can easily find multiple banks offering temptingly low rates of interest in order to attract business. Switching to some new lender allows the borrowers to take advantage of such deals to get diminished monthly repayments.
Sometimes the rates are low at the time of the deal but the experts predict a rise in next few months. With the tool called remortgaging the borrower can enjoy a deal at fixed rates. The borrowers have an option to “lock” the low rate of interest for the mortgage that stays the same for the next few years, no matter what the base rate undergoes.
Increase in income or rise in the value of property can be used by the borrower to elevate his/her mortgage that can be used for some major expenditure such as university costs of a child or weddings. Remortgaging is a better option than borrowing discretely and in some cases from a more expensive source.
Over the last decade a significant growth has been seen in the property prices. This is beneficial for those having a huge amount of equity in their house. Switching for a Remortgage upper than the mortgage balance can release a little of the equity for the borrower to spend. The best part is that this can be done at a lesser rate than any secured loan.
Remortgage is undoubtedly more convenient and cheaper and even allows the borrower to take care of several other expenses that can be paid for by the process of remortgaging. Thus remortgaging is nothing more than changing the existing deal into a more profitable one.