Remortgaging your property can potentially lower you overall debt and reduce your monthly payments. If you are struggling to make ends meet month after month this might be the option for you. Here is an overview of what a remortgage is and how it can benefit you.
A remortgage is not a second mortgage, so there is no additional debt load associated with a remortgage. Instead, it is a new loan negotiated on the property. Once the remortgage loan is complete, the proceeds are used to pay off the existing loan, replacing it with the new loan. This give you the opportunity to renegotiate the terms of your loan, secure a better interest rate, and provides the opportunity to take out some of your built up equity – if you qualify. Even if you have bad credit remortgage lenders are still willing to look at your application. They may have additional requirements you need to meet, but getting a remortgage is not out of the realm of possibility.
Applying for a remortgage is the same process as when you applied for your original mortgage loan. Your property will have to meet the requirements laid out by the lending company. This means that it will have to be re-inspected and reassessed to ensure it meets the minimum standards before your remortgage application will be approved. If you are applying for a bad debt remortgage then there may be some additional prerequisites you will need to meet as well. Most often this will be a minimum amount of equity built up in the property you want to remortgage. The amount of equity required can vary by lender, but is typically about 10%.
By renegotiating and refinancing your loan this way you might be able to realize a significant savings in your monthly payments as well as the overall amount that you will have pay on the loan can be reduced if you can secure a better interest rate. If you are able to withdraw some of your equity then you can use the money to pay off other debts, such as credit cards, which will reduce your monthly obligations as well. Securing a remortgage can help you get your finances back in order and reduce your debt load and your stress level.