Remortgage’s are normally used to either capital raise to pay off debt, release capital for a further purchase or dependent on the remortgage rates available in the market at that time, to find the best remortgage deals, thus making your monthly payments cheaper. You can either stay with the same lender or look at a new provider depending on what is the best deal for the individual.
When it comes to remortgages there is sometimes confusion surrounding the term remortgaging and secured loans. They are fairly similar in lending apart from rates, secured lending will cost more. They both have a legal charge on the property in question. With a remortgage you have the choice from the whole of the market place, with a secured loan there are no more than 20 providers, thus less choice. A remortgage will allow you to borrow up to 90% loan to value, subject to credit score and income, where as a secured loan you would normally be looking up to a maximum loan of 100k subject to you having equity in the property up to 70-75% after drawdown, plus income to support new loan.
When looking at a remortgage there will be certain factors one has to over come, the first one would be knowing what product to select, in this case we will look at fixed rate mortgages. This type of product will guarantee that you will know how much you will pay on a monthly basis, this will help when budgeting. You will normally be tied into this product for a set period all depending how long you wish the guarantee to stay in place.
Those people who like to have a product that has low interest rates will most probably plumb for the tracker rate remortgage, this product will track The Bank of England base rate, if interest rates increase so will your mortgage payment to the lender, where as an offset tracker remortgage will link your current account with your mortgage account, instead of receiving interest on your current account this will reduce your mortgage account balance. This product is extremely popular with higher rate tax payers.
There are numerous other choices in the remortgage market, from variable rate remortgages to buy to let remortgages, with such a choice, we would strongly recommend that you seek independent financial advice as to what is the best way forward.
The housing market has been hit the hardest, banks have had to have help from the Government as they became increasingly insolvent, without the government and the taxpayers help these banks would have gone into liquidation. This credit crunch has not only hit the UK, this is a worldwide recession, the Council of Mortgage Lenders has said that only 25,000 remortgage’s actually completed in August 2009, that was down 13% on July’s figures and 19% down on the year earlier, this has put great pressure on homeowners as capital within the housing market has nearly dried up due to the capital restrictions on the mortgage lenders.
Banks and building societies in the last few months have had to slash interest rates and booking fees, to draw in the new and existing clients, there once again is a real market place to look at getting some fantastic deals in this market place, but why has this changed? Well in October 2010 stated that the market was getting back on track, as in September 2010 there was a huge increase in business as remortgages jumped 35% and as a result this has lead to all bank and building societies looking to retain or gain new clients with lower interest rates on offer.
So what’s the advantage of remortgaging? Well it can help in the consolidation of higher rate debts, such as car loans personal loans and even credit cards, similar advantages include the benefit of lower interest rates, to release equity to pay for school fees, weddings or even the house being extended.
Before you look at remortgaging, you will need to make sure that you have sufficient equity within your property, you will need at least 10% equity, there is also the credit score, check with Experian or Equifax and make sure that you have not missed any payments to any lenders that you have a credit agreement with. Banks are continually looking for people with a good clean state of affairs, they will refuse you if you have recently become self employed for instance as they will ask for two years accounts, you could have changed jobs and are on probation, something as simple as this will not get you a remortgage.
When looking for the best remortgage deals get some expert advice before making any financial decisions, let a professional help you, especially now lending criteria has made it increasingly difficult to place a remortgage. There are some many ways an IFA or whole of market mortgage broker can help you, they will take the stress away from the start and from the initial meeting you will know whether or not you are likely to place your remortgage with a lender. These professional may charge you for advice but it is well worth it, should they be able to place your remortgage with a lender, it will give you piece of mind and they may be able to save you money in other areas.
James writes for Just Remortgages one of the UK’s top sites for information on the latest remortgage rates, and best remortgage deals available in the market.
Related posts:
- A Secured Loan And A Remortgage And What They Are.
- Interest Rate Facts For Secured Loans, Mortgages And Remortgages
- Fixed Rate Remortgage – Who Else Is determined To Track Down The Perfect Remortgage
- Compare Remortgage Deals Always.
- Homeowners Should Always Apply For Secured Loans And Remortgages.
- Deciding Between A Secured Loan And Remortgage.
- A Few Key Points Concerning A Remortgage
- Low Rate Remortgage – More Suggestions On Choosing the Top Loan Package
- A Discussion On Why You Should Remortgage Your Home
- Some Similarities Between Secured Loans And Remortgages
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