Remortgage is all about switching your mortgage to another mortgage lender, in order to lower the amount you're paying on your mortgage. In short a remortgage is about saving money. It is of particular relevance if the value of your home has risen. Remortgaging usually involves changing your mortgage lender, though not necessarily. Most lenders offer the sort of special deals you'll be looking for only to attract new customers into their web and deliberately exclude existing customers. How Much Can I Save? If you're paying an interest rate of say, 7.5% on a $100,000 loan and you can change your mortgage to another, which charges you 7% you'll be saving $31 per month. That is $372 a year or $9,300 over a 25 year mortgage term. The main thing to know is the cost of the penalties you will have to pay for giving up your old mortgage. A quick call to your mortgage provider should tell you this. Just have your reference number to hand. Similarly a quick call to an Independent Financial Adviser or the possible new mortgage provider will show you how much your new mortgage will cost. Why Isn't Everyone Remortgaging? Remortgaging is fairly easily to research. However there's a lot of ignorance of the sort of savings possible and, of course, our old pal consumer inertia plays its happy role. That's not too surprising considering the hassle, most of us remember about the process of getting a mortgage in the past. Even if they want to reduce their mortgage payments, some of us, sign up to deals where we didn't think the leaving penalties would be a problem. How Easy Is Remortgaging? In the bad old days remortgaging was a complicated process. You had to shop around and sort through the miasma of the mortgage lenders' jargon.Now however, lenders are "up for it", desperate to steal customers from their competitors and will offer deals deliberately aimed at doing this. All you have to do is give your details to a mortgage broker or IFA and see if they can come up with a better deal. Shop around to make sure you're getting the best remortgaging deal possible. If it's going to save you money take your hands out of your pockets, straighten your back and sign the lenders application form - which the broker / IFA will have sent you. We recommend you always get three quotes when buying any financial product. How Do I Choose The Best Deal? The bottom line is you're looking for a mortgage with a cheaper interest rate. Watch out for tie ins, either with insurance to go with the mortgage, or the penalties that will hang like a noose around your neck to make you stay with the lender after the special rate has expired. These drawbacks should be taken into careful consideration - but they're easily checked. The best remortgaging deal may be one that doesn't offer the lowest interest rate but doesn't tie you in.
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