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Re-mortgaging couldn’t be simpler these days and the one of the main purposes of re-mortgaging is to find a better deal than your current mortgage. People often re-mortgage just to obtain a lower rate of interest; however, re-mortgages can also be used for home improvements, debt consolidation or even paying for a wedding. The re-mortgage process simply pays off your existing lender with the outstanding mortgage balance which will then be followed by you borrowing either the same amount or larger depending on whether you will be releasing some equity in your property.
There are various types of re-mortgage products on offer by lenders. A cashback re-mortgage is one type of this financial product. The main difference between this type of re-mortgage and a standard re-mortgage is that you are entitled to receive a lump sum up front as well as the agreed re-mortgage amount. These cash back re-mortgages are usually available within the lenders standard variable rate (SVR) product. However, some lenders also offer the cashback facility on tracker rates as well.
Depending on lender, the amount of cashback differs. Lenders will typically be able to offer the ability to borrow a minimum of 5% of the re-mortgage amount as a cashback option. Therefore, as an example if you were to borrow £200,000.00 mortgage, you would receive an amount of £10,000.00 as cashback upon completion. However, you should check the finer details of the cashback facility as some lenders will impose a maximum amount of cashback that they are willing to pay out. Some lenders will also agree to pay for any arrangement fees that will incurred as part of the re-mortgage process. This can be incorporated as part of the cash-back option as well as receiving a percentage of the mortgage amount.
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