subject: What is a Remortgage [print this page] What is a Remortgage What is a Remortgage
To completely understand a remortgage, it would probably be best to first understand what a basic mortgage is. A mortgage is basically a loan that is given to secure a particular house or piece of property. When a mortgage is taken out on a house, it is essentially a promise that the money borrowed is going to be repaid back. If one does not pay the mortgage back, there could be some pretty drastic financial consequences because a mortgage could quite possibly be the largest loan a person can ever get. Mortgages also come with interest rates that could cause a financial setback for the person who took out the mortgage, if not handled properly.
Now that you know briefly what a mortgage is, it is probably safe to begin our discussion of remortgages. If you have any grammar knowledge, then you probably noticed the prefix "re"at the beginning of remortgage; this essentially means that a remortgage is a mortgage done after the original mortgage. A remortgage is essentially another mortgage that is taken out from a different lender, to replace the previous, existing loan. The new lender, in which you took out a remortgage with, will finish paying off the existing mortgage leaving you to pay off just the remortgage at this point.
There are actually quite a few individuals who get the terms "remortgage"and "refinance" confused. A refinance loan and a remortgage are tremendously similar in many aspects but where as a remortgage is taken out by a completely different lender than the original mortgage, a refinance loan can be taken out by a different lender than the original as well as from the original lender. Mortgages, remortgages and all of the details that come along, are already confusing enough by themselves, but it is vital to not get a refinance loan confused with a remortgage loan.
While there could potentially be a variety of reasons in which an individual takes out a remortgage loan, the main reason typically entails the element of saving money; everyone likes to save money. A lot of individuals will choose a remortgage loan because it may come with a lower interest rate, which even if it is only lower by a little, can help save quite a bit of money. Lower interest rates also may mean that an individual does not have to repay as much throughout the life of the remortgage loan. If an individual is trying to release equity in his or her home, then a remortgage loan may make this process possible.
A remortgage is no different from a regular mortgage when it comes to applying; you merely go about it just as you would with a mortgage loan. Simply fill out the new lender's application form and get them all the necessary paperwork that they will need to approve your remortgage loan. Hopefully you will have no trouble in getting your remortgage approved.
