Remortgages - A Insurance & Debt SOS Guide
A remortgage is a new mortgage that homeowners can take out that will inturn pay off their existing mortgage, leaving them to begin payments on the new one instead.
Homeowners often choose to re mortgage their homes for a number of reasons. Whether it is because they’re heading to the end of an existing deal and are looking for a new deal, want to shop around for a lower rate, or simply want to consolidate their debts.
If you have a number of unsecured debts that you’re struggling to pay off, then a debt consolidation mortgage could be the best option.
Remortgaging will allow you to take out a new mortgage that’s big enough to pay off both your original mortgage and all of your existing debts.
In effect you’d be wiping out all your other debts, but would in turn end up owing more money to your mortgage provider.
The benefits of re-mortgaging in that you could greatly reduce your monthly payments due to the fact that the remortgage will likely offer a much lower APR that what you’re currently paying on your unsecured debts.
It will also make your monthly finance a whole lot simpler as you’ll only need to make the one repayment.
It is also worth noting however that spreading the payments over a longer period of time could mean that you end up paying more money in the long run. There is also always the risk that when you add other debts to your mortgage you do run the risk of losing your home should you fail to keep up with the payments.
Using a Remortgage To Free Up Cash
A re-mortgage can be a great way to release some equity in your home and free up some money.
The value of your home minus the outstanding mortgage and any secured loans is your equity. In other words, the equity amount is the value of the part of the house you actually own.
It is common for home owners to free up cash from their equity to undertake home improvements which will add to the overall value of their home should they decide to sell it in the near future.