A remortgage (known as refinancing in the United States) is the process of paying off a mortgage with the proceeds of a new mortgage using the same property as security. The term is primarily used commercially in the UK, although what it describes is not unique to one country. Often the goal of switching is to secure more favorable interest rates from different lenders.
The remortgaging process usually does not involve moving a house or taking a second mortgage on the property; it applies the transfer of a mortgage from one lender to another. Homeowners may choose to remortal for various reasons, usually to reduce the total monthly mortgage payment amount. However, other reasons may include to reduce the size of payments, to pay off the previous mortgage, to raise capital, or to consolidate other more expensive short-term debt.
Homeowners often abuse the expression of remortgage when they simply switch from one product to another with the same lender; this is not a remortgage that involves the removal of one lawsuit over property and substitution with another in favor of a new lender.
The ability to remortate depends heavily on individual circumstances and because the costs incurred can be enormous, you should always seek advice from qualified individuals.
In the United Kingdom, the majority of remortation rates follow the Bank of England's basic tariff. The base rate has been at historic lows of 0.5% since March 2009. Due to the low rate of this record many people with existing mortgages may be able to remodel their homes from higher levels to lower levels which can result in savings on monthly mortgage payments As with any large payroll financial investment should always be done with the right advice from a suitably qualified professional. The timing of remortgaging is important especially when a base rate increase in the UK will undoubtedly impact the knock-on of rising monthly payments on mortgage homeowners.
Video Remortgage
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Source of the article : Wikipedia
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