If you’ve seen advertisements for remortgage quotes, you may be wondering just what they are.

What are remortgages?

The exact definitions may vary a little between lenders but essentially, this relates to the idea of redeeming any existing mortgage you have on your property and replacing it with a new one.

If you already own your property outright, a remortgage may be putting a mortgage in place where none currently exists.

Why would I wish to do that?

There may be a number of reasons:

• you may wish to raise capital against your property to fund a project (or debt consolidation etc);

• you might be looking to replace an existing mortgage with a new one at a lower rate of interest – thereby saving yourself money.

For example, if you have an existing mortgage of £50,000 and a house value of £200,000, you may be able to borrow £75,000 to enable you to redeem the original mortgage and have £25,000 disposable cash left over.

Is a remortgage the only option for borrowing against my property?

No, it is not. You may be able to take out other forms of secured loan against your property.

If you remortgage though, you may find advantageous interest rates.

What about properties in joint names?

That will typically be no problem, however, note that you will need the support and legal approval of the other owner involved.

How is the maximum remortgage amount arrived at on remortgage quotes?

The maximum may be arrived at, by looking at a number of inter-related factors, notably:

• the valuation of your property;

• your earnings;

• your other financial commitments.

Responsible lenders will always try to work with you to ensure that you borrow only sensible amounts that you can afford to repay, however, the ultimate responsibility rests with the borrower.

That is also why it is important that you openly and accurately declare your income and existing financial commitments etc.

Could I lose my home if I don’t repay the remortgage?

Yes. This is no different to a conventional mortgage in that respect.

In fact, although there may be some technical legal differences, you may also lose your home if you fail to keep up repayments on any loan secured against it.

Remortgage quotes or their supporting documentation will typically highlight these and other pertinent facts.