A quick guide to remortgage

A quick guide to remortgage

Refinancing means that we are taking a new mortgage to repay an existing one. There are instances when we require funds for some new construction, such as an extra bathroom, new kitchen, additional bedroom, etc. Many times we find that some of our existing borrowings, charge higher rates of interest than those charged by our mortgage lender.  In such cases, we can use the additional home equity available with us to provide funds and ease the repayment burden by refinancing.


The UK, in recent times, has seen a sharp decline in mortgage rates. Therefore, more and more homeowners having existing mortgages, are applying for a refinance to take advantage of the lower rates.

<a href=”http://www.get-secured-loans.co.uk/personal_secured_loan_mortgage.html”>Refinancing</a> has become an easy process due to the increasing use of information technology in the lending process. People can now apply online for a refinance right from the comfort of their home or office.  This has significantly reduced the time and effort for getting a property refinanced.


Considering the reduced interest rates and easier repayment options, the homeowners often see refinancing as a good source for generating capital. Changing high-interest debts into low interest refinance with easy repayment terms is often, quite lucrative for the debtors. By changing their debt type they can significantly reduce the repayment burden.

There are many lenders in the UK market, which provide competitive refinance offers. Since refinances are used to move debts; it should be seriously considered that the cost of moving debts should not offset the savings in any such process.

The redemption fees are the biggest cost to be incurred while taking a refinance. A redemption fee is what a person has to pay when he ends an existing mortgage contract and applies for a refinance. There are early redemption penalties, which escalate the overall costs of refinancing. These penalties are the largest when the debt is still new. Generally, refinancing is not advised when such penalties are very high, but if you have a particularly good offer, which offsets the loss due to the early redemption penalty, you should consider it.

In addition to the redemption fee, there are many other costs involved with refinancing. Some of which are discussed below:

· The new lender who will provide the debt will like to reassess the value of your property to make sure that it is not a risky deal for him. So, he might charge some valuation fees for this process.

· The entire refinancing process has a legal angle attached to it. This might involve legal consultation fees. In addition to these, the lender might include the conveyance and other official charges.

The debtor should consider these fees while refinancing. Options are available, where the lender might refund all or a part of the valuation, legal, and office charges to the debtors if the repayment schedule is exceptional. Be sure to ask your lender about such an option.

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