Remortgage is similar to refinancing, except you normally pay off your current loan with a new mortgage from a different Mortgage company.
Just because the interest rates are down and everyone else is remortgaging, doesn’t mean it is the right time for you to remortgage. There is more to consider than just interest rates.
The costs associated with remortgaging should be part of your decision to remortgage or not. A new interest rate and loan terms sometimes will end up costing you more later.
Here are some of the costs associated with a remortgage, that you must know about before deciding if it is right for you or not, interest rate, mortgage insurance, adjustable rate, negative amortization, pre-payment penalty, points, escrow fees, title insurance, origination fee, appraisal fee and many more.
Your mortgage broker should take the time to go over your current loan with you (if they wont then find a different broker), have them show you what your current loan is costing you if you do nothing different. Ask them to show you a couple different scenarios, one is how much it would cost for the life of the loan and the other is for a shorter term such as the length of time you plan on staying in the house or the length of time before you refinance again for some other reason.
Once you have the figures on your current loan then you are ready to start looking at other loans. Have your mortgage broker start looking for other mortgage quotes so you can compare. When they have the best mortgage deals they can find sit down with them and go over your same scenarios to see what the cost of the new loan is going to be. With this new information you are now ready to decide if a remortgage is right for you.
There are thousands of mortgage companies all over the nation, many are licensed to do business in your state, so don?t feel like you have to use the first one that comes along. Remember they work for you and if they want to earn there commission than they are going to help you understand the loan process.
You should not pay any upfront processing fees. If your broker is requiring a fee to take your application find a new broker.