Remortgages Info

"Borrowers can save thousands of pounds just by switching mortgages."

Remortgaging has become big business for lenders. Borrowers have now wised up in the mortgage market and understand that they could save thousands of pounds just by switching to a new mortgage. The whole remortgage process has become very straightforward and one of the main reasons to remortgage is simply to find a better deal than the current mortgage. Remortgaging can also be effective at releasing any equity you have in you property. By doing this, the extra funds can be used for home improvements, debt consolidation or even paying for a new car. During the remortgage process, the existing mortgage lender will be paid the outstanding mortgage balance which will then be followed by you borrowing either the same amount or larger depending on whether you will be releasing some equity in your property. The new mortgage can be borrowed from either your existing lender or a new one.

As the remortgage market has grown, the number of products on offer has increased and there are now various remortgage products on offer by lenders. A discount remortgage is one type of this financial product. The discount part relates to the interest rate that you will be charged for borrowing the loan. For an agreed period, usually 2 to 3 years, you will be eligible to discounted interest rates. This means that you will be paying a percentage below the Standard Variable Rate (SVR). Therefore, you have a guaranteed lower rate for a set period of time. This is a cost effective way of remortgaging as you will be paying lower monthly repayments to the lender, however after the discounted period has ended you may have to switch to the lenders current SVR for a length of time before you are able to remortgage again to a better deal. This will increase your monthly mortgage payment during this period which is a factor that you should be aware of.

Labels: Discount Remortgages