Remortgaging FAQ (Detailed)

When you are looking to save some money the first thing that comes to your mind is the money you paying for mortgaging your property. One of the many ways of saving is remortgaging your property for a better deal which will help you save some money. However, when you make up your mind to remortgage your property a number of questions arise in your mind. A few frequently asked questions are mentioned below and if you are still left with some questions than it is advised to consult a mortgage agent.

  • What is remortgaging?
    Remortgaging is a process in which a person transfers his mortgage from one lender to another for better. This is mostly done to save some money by transferring the mortgage to one with lower interest rate so that they can save on the monthly repayment.
  • Can a borrower mortgage more than once?
    Yes! The borrower has the liberty to mortgage their property more than once. However, you should be careful while doing it and calculate the profit that you would be getting. Every time you mortgage your property there is fees charged both by your ex-lender and the future lender.
  • Can remortgaging affect the borrower’s credit rating?
    You can remortgage your property as many times you want. Every time you remortgage your property it gets registered in your credit file. However, if you make too many applications it may be a drawback especially if it is getting rejected by many lenders. The next time you apply for mortgage the lenders may deny thinking you as a risk. It is thus advised that while remortgaging you should make wise decision.
  • I wanted to remortgage my property to interest only mortgage. What type of investments is required to run along with it?
    There are a many options of investments which include, pension, Individual savings account and an endowment and the best thing is that all of them provide tax benefits. However, most of the help that you require in this regard may be provided by your lender.
  • Is remortgage possible with bad credit history?
    Yes! You can mortgage even if you have a bad credit history and is definitely good news for you. However, to get the best deal and the lender who will provide the mortgage most favorably. They will be in the best position to help you with the right lender. However, you may have to pay an interest rate which is higher than the one who has a better credit history.
  • What all information I need to furnish to the lender if the borrower is self-employed?
    If the borrower is self-employed he will be required to provide the lender three years audited account and some may agree with just two years account. However, if you are unable to provide the same the lender would like to know the reason for the same. For newly self-employed borrower it is advised that they take help of a broker to help them get a deal as it may be difficult to find the right deal especially if you want at your own rate of interest.
  • Is remortgaging useful if the borrower’s mortgage loan amount is low?
    The loan amount does not play a very important role. The most important thing is calculation. Even if your loan amount is low and when you do the sum you find that you can do saving of your mortgage, remortgaging is definitely worthwhile. You need to weigh the cost of remortgaging and the saving that you will make if you are remortgaging your property over the term of your loan. However, sometimes it is better to stick with your current mortgage lender.
  • Can I remortgage my property for home improvement?
    Yes! It is possible to remortgage your property for some extra money if you have equity. Many people do borrow more for doing some work in their home by remortgaging. One of the benefits of this is that it may also add value to your home in the long run.
  • If the value of my home has increased how will it help in remortgaging?
    If the value of your home has increased in the long run it can help you in borrowing more of money if you want. This is termed as “equity release”. However, while doing so one should remember that the deals for remortgaging are linked to lowest loan-to-value ratio and hence it should be considered while taking up loan which is a major percentage of your property.

There will be many more questions that will come to your mind when you think of remortgaging. However, a good broker will help you get best deal and also provide answers to the entire question that may be coming in your mind.