What Is Adverse Remortgage?

Adverse remortgage, also known as refinancing is the action of paying back one mortgage with the proceeds from a new mortgage using the same property as security. The term is mainly used commercially in the United Kingdom, although what it identifies is not uniquely British. Often the intention of changing is to secure a more encouraging interest rate from a different lender.

The Adverse Remortgaging process does not generally involve moving home or taking out another mortgage on the property; it is in effect the transfer of a mortgage from one lender to another. Home owners may decide to remortgage for different reasons, might be to bring down the size of repayments, or to pay back a mortgage sooner, to raise capital, or to consolidate other debts.

Homeowners often miss use the expression Adverse Remortgage when they're merely changing from one product to another with the same lender. An Adverse remortgage involves the removal of one legal charge over a property and its replacement with a different in favor of a new lender.