What is a Remortgage?

remortgage loans

Remortgaging means renegotiating the original mortgage deal without moving your house; it may involve getting a better deal from the current lender or it may mean shifting to a new lender offering competitive rates. Remortgage will usually require an updated valuation of the property, which will take into account any changes in value due to home improvements or due to fluctuations in the property market. It is important to note that remortgages once accepted as a possible solution to your way out of current cash crunch shall involve costs such as redemption penalties. These need to be taken into account when considering a remortgage deal. However, it has been observed that often the benefits of remortgage have outweighed the costs involved. Rehousedebt is in the business of help rather than hurting its clients.

Cash requirements

The reasons UK homeowners find themselves in need of extra cash are endless. Some experience misfortune such as job loss or job reduction, sickness, death of a spouse, or divorce; others due to poor financial education or circumstances beyond their control mismanage their meager incomes and live beyond their means, which forces then down the path of financial crisis temporarily. As a result, at the end of the month, they are cash strapped. Remortgaging or remortgages may be a good way out of your financial crisis. A Redhousedebt advisor may be able to give you an independent/no obligation financial restructuring debt solution if your circumstances allow solution to fulfill your cash requirements.

Benefits of Remortgage

Remortgage is an excellent debt solution for homeowners who just need extra cash to help pay up unexpected large bills, mounting personal loans or credit cards. Raising cash through a remortgage is cheaper because interest rates on mortgages are amongst the lowest of all the different types of loans. This means you can replace credit card debt or personal or any other loan with one lower interest rate remortgage and spread lower payments over a longer period. Let us consider an illustration to see how it works:

Modus Operandi

Larry Williams bought a house for £100,000, with a 20% deposit of £20,000, four years ago. To cover the balance £80,000, he took out an interest-only mortgage. Since moving in, he made some home improvements and redecorated the house. Moreover, because his house is situated in a desirable area, it is revalued higher at £115,000 today. Post the Christmas season this year, Williams realized that his high interest bearing personal loans left over from initial down payment of the house/credit card debts are touching £10,000 and he also had a car note for £10,000. As the mortgage was interest-only, he still owed £80,000 to the lender. Luckily the equity in the house is £35,000 (= £115000 minus £80,000). With a four year established good credit on his house payments and restructured remortgage deal for £100,000 from RedHouseDebt, Williams used £80,000 to repay the previous house loan and the rest £20,000 was used to pay back the other high interest bearing debts. The consolidated repayment worked out into a lower single payment leaving some extra cash in his pocket each month.

RedHouse Debt

Debt Solutions are available for asking from RedHouse Debt Advice team. RedHouseDebt has helped thousands of UK homeowners save cash each year by recommending the best deal to suit their personal needs.

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