Remortgaging

[MORELLO]

Can anyone explain to me exactly how remortgaging works? I bought my house three years ago for 60k, and it's now worth 110k+. How do I use some of that cash, say 5-10k, and would my mortgage payments significantly increase?

[Loosehead]

Well there are 2 main ways;

a) Obtain a further advance from your current lender for 10k

b) Obtain a bigger mortgage for say 70k and use 60k to pay off your existing mortgage and use the 10k

b may well be better as you could prbably get some sort of discounted rate. The again your existing lender may offer a deal to keep the business.

[vicars]

If you have very basic knowledge you would be advised to see a mortgage broker. However the first step would be to see your existing lender to see if your income is enough to give you more money. In this way you do not need to change your mortgage lender and can simply top up your existing loan. With the knowledge of what they have to offer it would be up to a broker to find you a better deal that makes it worthwhile moving your mortgage elsewhere. Re-mortgaging is the process of moving your mortgage to a new lender or changing the mortgage deal you are on with your existing lender. If you stay with your existing lender it can be easy as signing a 2 page form abd perhaps paying a small admin fee. If you change lenders you may be able to get a fee free deal but it can take 6 weeks or more to change and there will be more paperwork to fill in by far. You may find that by using your existing lender they can give you an advance on top of your existing mortgage, give you a better rate at the same time and you may end up paying less for more money!

Best of luck.