Skip to content

Financing Your Home – Remortgaging

BY Rachel | 24 September, 2021 | no comments

Remortgaging is the process of borrowing against your property’s equity to pay off existing debts or pay for specific items or renovations. Equity is available in almost all assets, including residential real estate, automobiles, businesses and other financial investments. When you borrow against this equity you can use it as collateral to obtain new loans. The equity that remains on the property is also referred to as free equity or second mortgage. The term equity release is used more specifically for remortgaging.

A home mortgage is a large commitment that requires repayment over many years. If you are planning to sell your home in the future, you will probably have to refinance again in order to secure financing from a new lender. However, if you intend to use your home’s equity in your home to fund your home remortgage or another type of home improvement project you should consider an alternative home mortgage product that does not require a long-term commitment.

Remortgaging involves borrowing against the equity held in your home. Many homeowners obtain home equity release loans to reduce their mortgage payment and improve the property value. Other homeowners receive equity release to finance major projects like adding a room to the house or building an addition to their home.

Remortgaging has two primary parties: the lender and the borrower. Lenders, who provide home equity release loans, also act as third-party representatives who take care of title closing and negotiating the loan documents. If there are liens on the property, these liens will be transferred to the lender upon the borrower’s request. Most home equity release policies also include a provision allowing the borrower to enlist help in managing their personal finances should they choose to remortgage.

In most cases, lenders do not require a high credit score for remortgaging. It is usually the case that your credit score determines the interest rate, fees, and other charges on your home mortgage loan. However, it is possible for you to get a home mortgage loan with a low credit score.

Regardless, of how you choose to go about financing your home remortgaging, the process should involve careful planning and realistic expectations. You should determine how much your home is worth, and the amount you will borrow. The terms of any agreement between you and the lender should be scrutinized before signing. There are many home mortgage loan providers available in the marketplace, and you may want to start by comparing quotes from a few different lenders.