Remortgage

This is simply the replacement of an existing mortgage with a new one.

You may do this to save money. This might be possible by switching to another mortgage product with the same lender or by switching your business to a competitor. Remember, if you switch lenders, the saving you make on the interest rate you pay may be partially or wholly eaten up by the transaction charges associated with moving your loan.

There may be redemption fees and reservation fees demanded by your old and new lenders. The old lender may charge you a penalty while the new one an arrangement fee .

The new lender will want to value the property just as your old lender once did. So there'll be surveyor s fees, not to mention some conveyancing . And that means solicitors are likely to get in on the act once again.

So, if you're considering a re-mortgage, do your sums carefully. You may find yourself facing the equivalent of several months mortgage payments, wiping out the benefits of remortgaging.

See also...

• Moneyextra's Mortgage Centre
• Moneyextra's Mortgage Comparison Service

Last Updated: January 2006 © Moneyextra.com

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