| For most homeowners, their house is their greatest | | | | because the bank that holds the second note has to |
| asset. When an emergency comes up, therefore, it's | | | | get in line behind the first lien holder for payment if you |
| also where they turn; why take out a high interest loan | | | | default. A remortgage is similar to a refi, but with a |
| when you can borrow against your equity? Of course, | | | | different bank; the new lender pays off your first |
| the danger in doing so is that you put your house on | | | | mortgage and returns any additional cash to you, |
| the line if you can't make the payments, but for people | | | | allowing you to draw down equity. With a remortgage, |
| with stable income who are experiencing the need for | | | | you never have two mortgages out on the house, so |
| extra cash, this can be a good option. | | | | they're easier to quality for and provide a lower |
| Generally there are three options for taking money out | | | | interest rate than a second mortgage. |
| of your home. A cash-out refi lets you renegotiate | | | | To qualify for a remortgage, you'll need the same |
| your current mortgage, hopefully dropping the interest | | | | paperwork as you did for the first mortgage: tax |
| rate, and borrow more than you currently owe. A | | | | statements, pay stubs, a reasonably good credit rating; |
| second mortgage is an additional loan against the | | | | basically everything to prove that you're likely to |
| house; generally these will have higher interest rates | | | | continue making the payments on your loan. |