What is a remortgage loan?

If a homeowner has a first mortgage it may be possible to apply to the mortgage lender (or another lender) for a remortgage.

Reasons to remortgage may be to reduce the mortgage payment or extend the term or raise additional funds.

If the mortgage is increased in size or length you should always remember that the interest charges over an extended period will be higher!

Is it better to remortgage or get a loan?

A remortgage involves the settling of the first mortgage. What if the existing mortgage is on a favourable fixed rate or has exit penalties?

It may be better to keep the old mortgage and either take out a second mortgage or even a unsecured loan.

Seek independent financial advice if you are unsure what to do.

Can you remortgage at any time?

You normally can remortgage at any time but beware of penalty fees, especially if you have a fixed rate mortgage or a discounted variable rate mortgage. Such fees are normally high at first but then decrease over time.

Can I remortgage with bad credit?

If you have significant mortgage arrears or have a poor payment record over the last 12 months the mortgage lender may be reluctant to offer you a remortgage.

The mortgage lender will look how you pay all your secured and unsecured debt and assess affordability.

If you have a history of bad credit It will be important to demonstrate improved future income.

If the mortgage lender is happy that your circumstances have improved you may be allowed to capitalise arrears and raise new funds to consolidate expensive debt.

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