What Does Remortgage Mean?

In straightforward, when you remortgage you will move your mortgage from one lender to another one with the objective of getting a better deal. Remortgaging is a immense industry, with around one-third of all home loans in the current market being for remortgages.

Why Should I Remortgage?

Something that can trim your outgoings has to be a good thing and by remortgaging your property at a more advantageous rate you could save yourself a fortune. For most of us, the money we pay to our mortgage lenders is our biggest standard outgoing so, of course, it makes sense to take all possible steps to trim it. You no doubt shop around for other household goods such as electrical goods and beds so why should your mortgage be any different?

There are a couple of other reasons for remortgaging too: moving up the property ladder could be just the chance to change lenders; your financial standing might have undergone big changes – an inheritance or promotion, for example; you could be the subject of an endowment mortgage that won't cover your mortgage; you are overburdened with debts and would like to consolidate them all into a single mortgage loan. It can be emphasized strongly enough, however, that that last alternative should only be used as a last resort|final option|final resort|last option}}}.

Why Shouldn't I Remortgage?

If shopping around reveals that you already have the mortgage deal made in heaven – stop! The opposite is also true – if you have signed a mortgage deal that makes moving legally complex or expensive – or both – you're probably best advised to wait. And finally, in the existing market, if you need to borrow more than 75% of the purchase value of your home you are unsure to find a lender.

What Difference has the Credit Crunch Made to the Mortgage Market?

The current low interest rates mean that, if you're on a Standard Variable Rate (SVR) mortgage, you are probably better staying with your current lender, however, it is always good to shop around.

Having been damaged by their appallingly free and easy ways with money, lenders are now much more discriminating when it comes to selecting their customers. Before any lender accepts you as a patron they will want to assure themselves as to your credit-worthiness, so unless you have a pristine payment record, your chances of remortgaging your property aren't as good as they would have been previously.

You should recognize too that your original lender will probably charge you an exit fee and the new one will probably charge you a management fee. Then there are the legal bills… {{It's sufficient to say, whilst remortgaging may be the finest move you ever make, it is one that requires careful reflection.

Making the Right Mortgage Choice

The most appropriate mortgage for you might not be the most appropriate mortgage for your neighbor – choosing the correct mortgage is dependent upon current circumstances. The important choice to be made is between an interest only mortgage and a repayment mortgage; probably the best advice is to go for a repayment mortgage but this isn't always the case. Nevertheless, you will need to be a very wise risk-taker to make an interest only mortgage a good choice.

To be honest, there are far too many mortgage types available to discuss in one short synopsis but there are numerous net sites intended to help you take your pick.

We strongly advise that you consult a licensed mortgage broker who is not tied to a select group of lenders. And before signing anything, do find out what their cost is!

Making the Move

If you choose to do the work yourself, that is, without going through a broker – these are the fundamental steps to remortgaging your property:

1. Acquire a redemption code from your lender

2. Ask for quotes from the new lender

3. Remember to add both sets of fees to arrive at the final cost

4. Work out how much you stand to save – then re-evaluate whether it's sensible moving lenders or not

5. Make an application to to the new lender

6. Your residence will be surveyed and valued; legal works will commence.

7. Completion will happen in six to eight weeks.