A re-mortgage is when someone takes out a new mortgage to repay their existing one in order to realise equity and on occasion to reduce monthly payments. In order to do this you will need to transfer your existing mortgage agreement to another lender.

A re-mortgage will mean that the new lending company will pay the old provider the balance of the amount outstanding and you will continue making your payments to the new lending company. By re-mortgaging your home, you could save substantial amounts of money on your monthly payments.

One of the more common reasons for re-mortgaging your property is to reduce costs. By simply changing to a lower interest rate you can benefit from lower monthly repayments. You could also keep the monthly repayments the same, therefore, enabling you to repay the loan quicker and reducing the overall term of the mortgage.

When you are looking at re-mortgaging your property, the best advice would be to look around at the lender market at the different offers they have. All mortgage lenders will offer mortgage advice, as they will want to gain a larger customer base. By helping more people, they will have a better chance of gaining more customers. You should use this to your advantage. You should visit a number of different mortgage advisers, which will later enable you to use their knowledge to obtain a better mortgage deal.

The majority of the motgage advicer will guide you in the same direction. They will tell you that you must firstly look at your existing mortgage to see what benefits problems you have with it. If you feel that you are paying excessive rates of interest, compared to other lenders then a re-mortgage may save on your monthly payments. Due to the rapid rise in property values over the past few years, many people now have mortgages which are well below their home's current value. The difference between the property value and the mortgage debt is known as equity. The majority of mortgage lenders will allow you to increase the size of the mortgage in order to use some of this equity. The cash raised can be used for a variety of purposes, such as home improvements, holidays, a new car, or the consolidation of existing debts.

A re-mortgage is a great way of saving money, as it is likely to lower your mortgage interest rates. A mortgage is also one of the cheapest forms of loans around, so if you are looking to raise additional finance, it would be advised to re-mortgage your home.

There are various reasons why someone would re-mortgage. The majority of the time, it is just to reduce the monthly mortgage payments, although it has become an increasingly popular way for people to consolidate their debts. They will, therefore reduce the overall household outgoings each month. The advantage of borrowing money against your property is that the rate will almost certainly be better than if you took out a personal loan, and because you can spread the cost over the remaining term of the mortgage, the repayments are lower.

Arranging a re-mortgage can be a relatively simple process. There are no chains of buyers to worry about (like there are when you move house), so the whole process can often be completed in a few weeks. The re-mortgaging process from start to finish normally lasts between 4-6 weeks. In terms of costs there is no stamp duty to be paid, as you are not purchasing a property. Many lenders will pay some or all of your valuation and legal fees. However in some cases there may be an arrangement fee or booking fee from the new lender.

A Re-mortgage does have its problems though. The most visible one being that the repayment term of the mortgage will extend for another long period. The borrower needs to again spend on several fees like property valuation fees, legal fees, and administration and arrangement fees. This is excluding the early repayment penalty that some lenders will include for early settlement of their existing mortgage.

The decision on whether to re-mortgage or not must be taken with adequate caution. There have been times when borrowers have entered into a bad mortgage deal, simply to escape an existing taxing mortgage. The answer to a best deal mortgage is to being fully informed.

There are many reasons why existing mortgage holders would want to re-mortgage their property. This could be to consolidate existing debts, make home improvements, go on holiday or simply to buy a new car.

There are, however a number of problems and issues that you will need to consider when you re-mortgage. It is very important that you check your re-mortgage offer to make sure that you are getting a good deal.

It is always worth considering the savings you can make with a re-mortgage against the cost and penalties. In many cases, it can sometimes be worth paying these fees for the benefit of a new loan, particularly if the savings are substantial or the redemption penalty fee is small.When applying for a re-mortgage, you will generally find that there are often fees attached with a re-mortgage.

These fees would include costs like valuation fees, redemption penalties and legal costs.

Valuation Fees and Costs - Your future mortgage lender may charge you for valuation fees. This is due to the fact that most mortgage lenders will not rely on your original survey when assessing the re-mortgage value of your home.

However some lenders may offer free valuations as a way to make their offer more appealing or attractive. They are more likely to attract new customers if they are charging less fees.

Redemption Penalties - This is one of the most important issues you need to consider when re-mortgaging. Any special offers usually only last for a set period of time. During this period you will be severely penalised if you try to switch to another product or mortgage provider, either by selling your house or by re-mortgaging.

Lenders want to make sure that you stay with them until they have made a profit. They do this by charging you extremely high fees if you try and switch to another mortgage lender before they have done. These penalties can be mainly critical for the first year of your mortgage. This is to try and ensure that the costs that the lender endures in setting up the mortgage are always covered, regardless of whether or not you stick with the mortgage. The total redemption penalty charges can be as much as a few thousand pounds. This is normally enough to put most people off the idea of switching mortgage lenders.

The duration of the penalty period will vary from different mortgage lenders, although there are a high number of mortgages available that have no early redemption charges at all. You must, therefore ensure that when you are looking at various mortgages, you read the small print as well so that you are fully aware of how much, if any, the redemption penalties are if you were to re-mortgage.

Legal and administration fees will also apply with most mortgages. As with the valuation report fees, lenders may choose to refund these fees if you agree to use their recommended mortgage loan insurance and legal products.

There are a number of people who find it hard to re-mortgage their property due to the fact that they have obtained a bad credit history, CCJs, defaults or have simply become self-employed since they originally mortgaged their home.

People are normally refused a mortgage or a re-mortgage because they may be self-employed without accounts, or because they may have experienced bad credit problems. The interest rates of the mortgages will usually reflect the level of the lender, and the level of collateral available.

Some borrowers may need a higher income multiplier beyond the normal income multipliers in order to achieve the required amount of mortgage needed. This could simply be because of the rapid increase in house prices, if there is only one wage earner in the household, it would be very hard to obtain a mortgage for these properties using the normal 3 x method. There are a number of lenders available that can offer these higher income multipliers, but it is very important that the level of borrowings is not only affordable, but is also sustainable if you were to suffer a loss of income for any reason. This could be as a result of unemployment or reduction in income from overtime, bonuses etc.

• Some of the more common reasons for a remortgage include: To get a better mortgage rate in order to reduce monthly outgoings to consolidate debt, such as outstanding credit card balances to meet home improvement costs, such as a new extension to finance a business loan


• When deciding on a remortgage you should take into account a number of potential costs that you may incur as a result of the remortgage:
  Legal Fees Valuation Fees
  Arrangement Fees Solicitor Fees
  Dead Release Fees
  Telegraphic Transferee Fees
  Early Redemption Penalties
  Mortgage Indemnity Guarantee

If the following warning signs apply to you, you need to act now to preserve or repair your credit:
You are unsure as to how much you owe in total
You only make minimum payments to creditors (i.e. credit cards)
You are on/near the limit of all credit /store cards
You have been rejected when applying for credit
You put off paying bills until the final reminder
You are withdrawn every month
You have missed one or more rent/ mortgage repayment
You receive phone calls from creditors
You are constantly paying fees for late/missed payments

Bad Credit Remortgage Deals are much more widely available today than they were 5 years ago as lenders in the UK have developed more flexible remortgage products based on peoples lifestyles.
While your credit status (determined by your credit score) is probably the most significant factor in determining what kind of mortgage rate is available to you, many lenders are now taking a more flexible stance on who they lend to.
If you have a bad credit history and you are looking to get a better deal getting good advice can really pay off even if you have previous County court Judgements (CCJs), mortgage arrears, or have gone through an IVA (Individual Voluntary Arrangement) or have been made bankrupt in the past.

Our bad credit remortgage advice service puts you in touch with a regulated remortgage specialist who will be able to provide quotes from a panel of UK lenders who provide a range of products depending on your credit history.