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Financial Services > Mortgages > Questions > Remortgaging and Homeowner Loans

Re-mortgaging

A remortgage is where a homeowner seeks to release additional funds by borrowing against the revised valuation of the house. For example, if a mortgage was taken out five years previously for £80,000 on a house which was then worth £100,000; and the house is now worth £150,000 then it may be possible to release a substantial amount of that addition value. Remortgaging is often a far better way of borrowing money than taking out loans, or using credit cards, as interest rates are much lower.

However, due to the time involved in arranging a re-mortgage, it is only a suitable option for larger, longer term borrowing needs. You should also be extremely cautious about running up credit debts in the belief that you will always be able to pay them off by remortgaging.

Homeowner loans

For medium-term borrowing, it is possible to take out a home owner loan, which may be repaid over a period from one to ten years, rather than over the standard 25 years it takes to repay a mortgage. These loans can also be at attractive rates, as the house is used as security, in the event of repayments not being made.

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