Q: Remortgage – I am thinking about remortgaging to a better rate but I also want to know if I can borrow extra money to pay off some credit cards, buy a newer car and perhaps go on holiday too? I am happy to sell my old car to put towards it if that helps. I have a flat in London worth £650,000 and a mortgage of £155,000 left on it. I currently earn £37,000 per year as an analyst and my husband earns £16,000 per year as a self-employed plasterer. We are looking to borrow £3,000 to pay off the credit cards, £12,000 for the car and £3,000 for the holiday. How does a remortgage actually work? J Browne, Islington
A: A remortgage is simply the financial and legal process of switching from one mortgage lender to another. For instance, the Halifax Bank may be your current mortgage lender and you may decide to switch to a different lender to get a better rate and to borrow extra capital at the same time.
Everything that you have told me seems to indicate that getting a mortgage with a different lender will be straightforward but we do need to find out more about your circumstances before we can be certain. You have plenty of equity in your home and your joint income seems more than enough to cover the new mortgage and the extra money you want to borrow for the debt consolidation, new car and holiday.
The process is quite simple! First we need to have an initial conversation whereby I find out more about your circumstances, discuss your requirements and future plans. I will then collect some documentation from you before researching your case. If you are happy to go ahead with my suggestions, we will enter the application process. When your application for a remortgage is successful the new lender will arrange for a survey / valuation to be done. If the lender is satisfied with everything they will instruct a property conveyancer (solicitor) to deal with the legal administration matters of switching mortgage lenders. The new mortgage lender will pay the remaining balance to the current lender what is owed and arrange for you to get the money you want for the new purchases and debt consolidation you have in mind.
I will guide you through the whole process and meet your expectations in every way during the remortgage process.