A mortgage is a type of a loan or lien that is given by a bank or some other financial institution against some piece of property. The loan is supposed to be cleared off within the time frame allotted, and until then the lending institution remains the owner of that property.
Remortgaging is the process of renegotiating the current mortgage with the institution; i.e. renewing the loan with the present financial institution or finding another lending company to help in buying out the present mortgage loan. It is basically a contract of repayment that is advantageous to the current owner of the property. Obviously, the best mortgages are the ones with interest rates that are lower than the property owner's present mortgage rates.
One needs to take care of a few things before applying for a remortgage. There are a lot of things one should check, like the best quotes for interest rates. People who have good credit scores receive low interest rates and the ones with bad credit histories receive high rates, so the ones belonging to the latter group should be a little careful when looking for refinancing deals.
Fees are also attached with remortgaging. There are many financial companies that may not charge fees whilst some who will charge very less. If it’s a new lending company that you are with you might have to pay appraisal fees because the mortgage company will have to appraise the property to see if and how the value matches the amount for remortgage.
Note that the owner of the property should actually remortgage if the process allows him/her to save money. If the amount is not too huge, the owner can look for lending institutions who don't charge fees. The process of remortgaging actually saves money in a monthly basis due to a decrease in the interest, payment and the duration of the refinancing.
Once the owner of the property zeroes in on a particular lending company after deciding on the interest rates, expenses per month and the credit history as well there are a few processes that need to be followed to complete the step of remortgage.
- Proof of Employment. All kind of earning statements are to be submitted. If there are any other sources of income like trust fund, money won in lottery, etc are also to be shown.
- A statement of expenses is also to be submitted. The income and expenses, monthly and annually should meet the guidelines of the lending company.
- Examination of credit history is done after which an appraiser is sent to the property to determine the value of the remortgage amount.
After these steps and the completion of paperwork at the lending company the remortgage loan is approved.
Whatever the case may be, always do your math so that you will end up with repaying a lower interest that is less taxing on yourself.
