What are the typical reasons for pllying for a remortgage?

 1. RATE CHANGE

It may have been some time, perhaps years, since some people changed their mortgage. If this is the case then it is likely that they will be on their mortgage lenders' standard variable rate (SVR). This could mean that they are missing out on discounts and incentives normally offered by other lenders in an effort to get their business. With a remortgage, such borrowers may well save themselves a considerable amount by simply switching from one lender to another and moving on to a lower interest rate.

2. CONSOLIDATION

In this day and age where personal credit is still relatively easy to come by (even in the credit crunch) it is common for individuals to amass large credit card balances, have expensive car finance or even to have a secured loan. The monthly interest costs of these credit facilities can be substantial and sometimes impossible to keep up. If personal circumstances show that this is the case then it may be worthwhile consolidating them into a remortgage. Because the debt would be getting spread over a longer period then the monthly payments would be significantly less.

However you must always remember that increasing the term of these loans by way of a remortgage may well increase the overall interest paid. 

3. RAISE FUNDS

If you need to raise a substatial amount of money for any reason then a remortgage could be the way forward. For example;  home improvements, a new car, a dream holiday, school or university fees.   Using some of the equity in your home can be a cost effective way of releasing large sums of finance and is often cheaper than taking out secured loans. Assuming you stay within the permissible Loan-To-Value range, if you remortgage your property for a sum that is greater than the amount needed to repay the original mortgage, you get to keep the difference

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

You may have to pay an early repayment charge to your existing lender if you remortgage. 

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