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What is the meaning of Remortgaging ?

Date: 07 Feb 2015   Posted By: Muddassir     Group: Finance & Banking    Category: Banking   

Recently I heard a word - Remortgage / Remortgaging. I Don't know its meaning. I think it is something related to mortgage. Please let me know the exact meaning of Remortgaging.

Author: Vandana    07 Feb 2015      Member Level: Gold     Points : 3  (Rs 3)    Voting Score: 0

When you remortgage, you are basically making a switch from one lender to another, using the proceeds from the new mortgage you got to pay off the old mortgage from the previous lender. For both, you are using the same house/land which up put up as security for the mortgage. This process is not so common in India, though.

A person may use remortgage to take advantage of the initial low offer given by a lender, switching over once the duration of that offer is over to then take advantage of the initial offer of another lender. This thus reduces the overall costs.

Author: Timmappa Kamat    08 Feb 2015      Member Level: Platinum     Points : 2  (Rs 2)    Voting Score: 0

The exact meaning of REMORTGAGE is to pay off your existing loan by mortgaging the same property or asset to a different financial institution. This is normally done to take advantage of lower rate of interest. The term is most prevalent in English speaking nations like UK and USA. The equivalent term used in India is REFINANCING.
The process does not involve paying off mortgage to one financial institute and then mortgaging the asset to another institute. It just is a process of transferring the mortgage from one lender to the other. Most of the time we tend to refinance when repayments - or installments are lesser in the second one institute or you get a better rate of interest.

Author: Aman    11 Feb 2015      Member Level: Diamond     Points : 2  (Rs 2)    Voting Score: 0

Remortgaging means canceling your present mortgage and moving the loan to a different lender. Let me clear this term with an example:

Suppose your current mortgage is with the ABC bank but you want to Remortgaging it with some other Bank because you like their deal which will save your £100 per month. So Remortgaging will help you to change your your present mortgage and moving the loan to a different lender.

It is mostly done to save money as I also mentioned in the above example but it can also be done by many other reasons.

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