Learning how to remortgage to release equity from a home can be very useful for those homeowners who are looking to make the most of the equity that is not in their homes. For a lot of people taking up a remortgage to release equity can be used to fulfill any type of personal financial requirements. So if you are contemplating on the idea of remortgaging your property than this small guide will help you understand how to remortgage to release equity.

Understanding equity in your home

Before we touch on the topic of how to remortgage, let us first have a quick look at what exactly is equity? The equity in your home is the difference between the value of your property and any outstanding debt that is owed on your property. The outstanding debt includes your mortgage and any loan secured on your property. So generally the smaller the debt on your property in relation to the value of your property the more equity you have in your home.

So for example if you purchased a house for £100,000 and you paid a deposit of £25,000, you have repaid £10,000 mortgage and the house value has risen by £20,000 then the equity in the house is £55,000. And likewise if the value of your home was to fall to such a level where the value of your property is less than the mortgage outstanding then you have what is known as a negative equity situation. In other words if you were to sell your home in a negative equity situation you would not be able to repay your mortgage and in such cases you will not be legible to apply for a remortgage.

So in order to get a remortgage deal from a lender it is essential that you have sufficient equity in your property. If you have owned your house for a long enough period to see a good increase in its market value then there is a good chance that the equity in your home has increased (as long as you have not taken up further credit secured on the property). If you have sufficient equity in the property then the amount you can borrow with a remortgage will be determined by how much equity is actually locked into the property. In essence the more equity that is available the more you can borrow with a remortgage.

So if you’re looking to understand how to remortgage to release equity from your property then you will actually have a number of options available to you based on your personal and financial circumstances. For example you may find it harder to remortgage to release equity due to the fact that you may be too old to qualify for a remortgage. In such instances you may need to consider the traditional methods of releasing equity. On the other hand if you are young enough to be legible for a remortgage then you will potentially have a choice of a number of remortgage products to help you release equity with a remortgage.

If you would like to learn more about the best option suitable for your financial circumstances than contact us and we will be able to advise on a more suitable method of releasing equity from your property