Everything You Need to Know About Remortgaging Your Home

Remortgaging a home is a financial operation that consists of canceling the current mortgage on the property and taking out a new one using the home, again, as collateral, to obtain liquidity. The maximum amount will be set by the entity and the conditions may change with the new signature. Mapfre compiles in its Retirement and Pension blog everything you need to know about this operation: why do it, advantages, disadvantages and what it costs.

Why remortgage a home?

The main objective is to obtain liquidity. Mapfre includes the main assumptions to remortgage your home: buy a second home, undertake, make a reform or unify loans.

How to do it

To remortgage your home you must follow the following steps:

–Talk to your bank to study the feasibility of this operation and give you an answer. To do this, they will request additional information such as the current appraisal of the property.

-Then it will be necessary cancel the mortgage valid after the approval of the bank. You may have to pay some expenses that will be related to the Commission for the early repayment of the mortgage.

-Finally, you should sign the new mortgage. This will be the sum of what was left to pay on the canceled mortgage and the loan that has been requested again.

What are the costs of remortgaging a home?

Remortgaging a home entails a series of expenses that have to do with the cancellation of the previous one and the constitution of the new one. That is, the Commission for early cancellation and the expenses derived from management for its cancellation (cancellation before a notary and in the Land Registry); and the opening expenses of the new one, which are: Housing appraisal expenses, copy of the deed and opening commission.

Advantages of a remortgage

“It makes it possible to obtain liquidity in a simple way and helps to unify debts by getting a single installment paid. In addition, the amount that you will have to pay in this process will be less than having different loans,” explains Mapfre.

Disadvantages of a remortgage

The first is that the operation can be denied by the bank due to a lack of liquidity. On the other hand, the interest payment will rise due to the lengthening of the years in which it will be linked to a mortgage.

Are there alternatives?

Other ways to obtain liquidity without remortgaging your home are: extending the current mortgage, requesting a personal loan or requesting a second mortgage.