Remortgaging is a big deal. If you don't know what you are doing you might seriously risk your home - your most valuable asset. With the economic downturn many people are looking to remortgage just to stay afloat, but with the current economic climate its not always the best option. Getting the right refinancing loan is crucial not only to keep you afloat financially, but also to ensure that you secure your home.

These days there are dozens of refi options and depending on your own unique situation and requirements, you need to negotiate the terms appropriately. Here are the 2 main options you have:

1. Fixed Term Loan

With a fixed term loan you lock in the period of repayment on the loan. Its typically 6 to 10 years although you can bring it down significantly to as little as 1 year. The great thing about this is that you don't have the obligation of carrying the loan for years - and in the end you will save a lot on repayments. Make sure you negotiate the right term for your loan because early settlement does come with extra fees, so you will be held liable for repayments over the full period.

2. Fixed Rate

In a fluctuating economy like what we are experiencing currently, the home loan rates can be up and down very regularly. The result is that you never have a steady expense and chances are that it can skyrocket - leaving you in financial dire straights. A fixed term loan guarantees you a rate for the full period of the loan - although banks always have some exemptions.

Knowing exactly what your repayments will be can be a real life saver and for those people who suffered from the recent fluctuations in the home loan rates it can make a real difference in your monthly budget.

You should also look into the other options such as open mortgage loans when you are looking to refinance. Virtually all lenders will work with you and help you to find the best rate and something that works for both of you. If you feel uncomfortable about anything in your new loan, don't do it. After all, you don't want to risk your house for the sake of a bridging loan.