help

amjed_afzal

This might ]ound stupid but can someone explain remortgaging

happycamel_2

Getting a new mortgage deal to replace your current one, sometimes with a new provider. Sometimes it's just fixing for a period of you've gone on to the standard variable rate.

Daniel54

Obtaining a new mortgage on a property where you have an existing mortgage

Not a difficult concept

kingstreet

happycamel wrote: »

Getting a new mortgage deal to replace your current one, sometimes with a new provider. Sometimes it's just fixing for a period of you've gone on to the standard variable rate.

Always with a new provider. Otherwise it's a customer retention product.

<pedantmodeon>Staying with the same lender, there is no change to the mortgage deed, so it isn't a remortgage.<pedantmodeoff>

amjed_afzal

happycamel wrote: »

Getting a new mortgage deal to replace your current one, sometimes with a new provider. Sometimes it's just fixing for a period of you've gone on to the standard variable rate.

I have a 5 year fixed rate but want to remortgage as the value has increased and I want to invest the money else where.
Once the remortgage is arranged and old one paid of will my mortgage payments stay around the same

BitterAndTwisted

Getting out of a time-limited fixed-rate could attract an early redemption charge.

If you are remortaging to extract equity, as your enquiry suggests, OF COURSE your mortgage payments will not stay the same! You will be borrowing more money so they will increase. Perhaps substantially, depending on how much more you want to borrow,

amjed_afzal

BitterAndTwisted wrote: »

Getting out of a time-limited fixed-rate could attract an early redemption charge.

If you are remortaging to extract equity, as your enquiry suggests, OF COURSE your mortgage payments will not stay the same! You will be borrowing more money so they will increase. Perhaps substantially, depending on how much more you want to borrow,

If my exisiting mortgage is 70000 and I want to remortgage for 90000 but the value of properry is 90000 then my mortgage should not go up coz of the new value of property or am I wrong

BitterAndTwisted

You are wrong. You will be borrowing another £20k and that won't be for free, will it?

Still, if your example reflects the real situation you will never be able to borrow 100% of the current value. 100% morgages are dead and buried, and for good reason.

SternMusik

amjed_afzal wrote: »

If my exisiting mortgage is 70000 and I want to remortgage for 90000 but the value of properry is 90000 then my mortgage should not go up coz of the new value of property or am I wrong

Hmm, where to start....! You have started a similar thread before ( https://forums.moneysavingexpert.com/discussion/comment/62901894#Comment_62901894 ) and still seem to be confused by the same thing. You really need to do some basic reading on mortgages.

A new mortgage or remortgage must be for less than what the house is worth. Typically < 90% of house value. Often much less than that. You cannot borrow the entire value of the house. The difference between the house value and the loan amount is called equity.

Your monthly mortgage payments are governed by the mortgage term (e.g. 25 years), the mortgage amount and the rate of interest, and whether or not you have a capital repayment mortgage or an interest only mortgage. If any of these parameters change your monthly payments will change.

BitterAndTwisted

You bought two houses last December and after spending £15k you think they have appreciated in value so much that you could extract equity? In the first couple of years you are paying mostly interest and a negligable amount of the principle of the loan, so I would dispute whether they have increased very much at all.

Secondly, you said that one of the properties was bought with a residential mortgage and it's now rented out. Is your lender aware of this and you have been granted Consent-To-Let?

The questions you are asking are frighteningly naive, so I wonder whether you rally have the financial acumen to finance and run a BTL empire.

amjed_afzal

BitterAndTwisted wrote: »

You bought two houses last December and after spending £15k you think they have appreciated in value so much that you could extract equity? In the first couple of years you are paying mostly interest and a negligable amount of the principle of the loan, so I would dispute whether they have increased very much at all.

Secondly, you said that one of the properties was bought with a residential mortgage and it's now rented out. Is your lender aware of this and you have been granted Consent-To-Let?

The questions you are asking are frighteningly naive, so I wonder whether you rally have the financial acumen to finance and run a BTL empire.

Thanks for getting back to me
The price has increased because I bought the properties cheap as it required work and since I run to sucessfuk business I want expand the business even more