RE MORTGAGE PROCESS AND BENEFITS

2007-05-02 10:04:19

( Financial )



What is Re mortgage?

Re mortgage involves getting a new mortgage replacing a current mortgage. The old mortgage fully paid from the proceeds of the new loan. You can avail a re mortgage from your existing lender or from other lenders offering this kind of loan. Your home equity serves as collateral for your re mortgage application.

Benefits of Re mortgage

Re mortgage allows you to avail of lower interest rates that will save you money compared to your old mortgage. You have the option to cash out part of your home equity when you avail of re mortgage loan. The proceeds can fund expenses for expansion of your homes, payment for credit card debt, payment for children’s college education or fund travel expenses.

People who change their employments and become self employed benefits can avail of non status re mortgages wherein the loan is designed for self employed individuals. Lenders usually are wary of lending to people with no fixed source of income like a regular salary. Thus, a non status re mortgage might incur higher interest rates and fees in exchange for less stricter requirements for income generation.

People with bad credit histories can still avail of re mortgage through bad credit re mortgage products offered by some lenders. However, like non status mortgages it charges higher interest rates for the risk face by lenders to people with bad credit history.

Process of Re mortgage

You can start inquiring on re mortgage to your current lender and check out their rates particularly for special offers for old clients. Try checking out other lenders for better rates. The market for re mortgage loans is very competitive. Lenders will try to lower their rates just to get clients.

You have to complete a loan application once you decide which lender to apply for re mortgage. The lender will then send an appraiser to evaluate the value of your home to determine how much loan to offer you. A solicitor will make sure that your old lender receives full payment for your old mortgage after finishing with all the necessary papers. You will receive any extra funds that you can use for whatever purpose.


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