Reasons to Remortgage Your Home

What is remortgaging? 
Remortgaging is a lending process that replaces a current mortgage with a new mortgage from another lender. The new mortgage, or remortgage, is then used to repay the current mortgage to the original bank. The borrower then has one mortgage repayable to the new lender. Remortgage and refinance are often confused. While the two are similar, one major difference exists. A remortgage means obtaining a new mortgage from a new lender, whereas refinancing a loan can be done either with the current mortgage provider or by selecting a new one. 
  
Several reasons are there to consider a remortgage. One of the most common is to save money. In a lot of cases, remortgaging means finding a lower interest rate which can not only lower the monthly fee that the borrower owes but may lower the total amount of money that is due overall. Remortgaging can also used to release equity in the home. 
  
Equity is the difference in the value of the home and the amount owed by the owners of the home. Through remortgaging, equity is released by borrowing more than the amount owed on the home. Equity on the home can be increased by improvements that have been made, so the revaluation of the property is essential to freeing up all of the equity you have built in the home, in addition to the amount you have paid off with your present mortgage. 
  
Remortgaging is a rather simplified process that may be accomplished in about four to six weeks. Normally fees are associated with a remortgage, but they tend to be less than those associated with a first mortgage. Some lenders charge a loan processing fee which varies from lender to lender. Generally, there are legal fees associated with a remortgage along with fees like property valuation charges. Generally, property valuation is not as intensive as the requirements for the first mortgage but in some cases it may be. 
  
Remortgaging is a better option than obtaining a second mortgage. Using the new mortgage to pay off the existing one can avoid having two mortgage fees and also save money with a lower fee due to lower interest rates. The questions to answer when considering a remortgage include the length of time you plan to live in the home, the interest rate difference and how much equity have you built in your home during the time you have owned it.