In the midst of the ‘credit crunch, a reduction in the amount of credit available to borrowers is not the only problem currently facing consumers. Any remortgage deal or other loans, and especially short term debts, have generally become more expensive over the last year.

Many of us have racked up credit card debts in the spending boom, and are now feeling the pinch. Faced with high credit card repayments and ever increasing costs of petrol, electricity and food bills, many individuals are struggling to make ends meet, and are using their credit cards as a way of securing short term borrowing. There has been a total rise of £717million in credit cards spending in the year to June 2008, indicating a massive rise in use of high interest, short term debt.

With the housing market falling in value by 10% so far this year, a forced sale in this market can mean losing considerable amount of money, especially if a move to rental property is being considered. This may make the option of securing a remortgage deal particularly attractive to many individuals who have substantial equity tied up within their property.

However, taking out a remortgage deal it is not an option to stumble into blindly: taking expert mortgage advice is critical to ensure that a remortgage deal is affordable and will leave a borrower’s day to day finances in a more affordable state.

To get the best rates on a remortgage deal it is imperative for all prospective borrowers to research the market thoroughly and get a wide range of remortgage quotes.

An independent mortgage advisor can put forward all deals that match a prospective borrower’s remortgage deal requirements, and will gather and compare a remortgage quote from the most suitable providers for their client to consider.

But in an environment where credit is more difficult to get, is it still possible to secure a good remortgage deal?

The answer is yes.

remortgage deals are still out there for the taking, and although the market has changed with higher interest rates being charged on fixed term remortgage deal , individuals who can demonstrate that they hold at least 25% equity in their current home are deemed ‘lower-risk’ borrowers: gaining a mortgage or re-mortgage should not be too difficult.

The remortgage deal market is showing signs of competition again, with providers starting to chase low risk business

What is more, there is some good news for individuals seeking a good remortgage deal : Nationwide and Abbey recently made significant cuts to their mortgage rates, and other lenders including the Halifax, Cheltenham and Gloucester have swiftly followed.

Suitably qualified independent advisors with an expert knowledge of the market will be able to provide impartial mortgage advice as well as gathering a remortgage quote from each of the providers that have a remortgage deal that meet their client’s requirements.

Consumers then face a difficult decision about whether to choose a fixed or variable interest rate on their remortgage deal.

Faced with a real prospect that Bank of England lending rates may fall in the near future, there is the risk that in some cases fixed rates on a remortgage deal could become more expensive than a variable interest rate remortgage deal in the future.

There has never been a greater need for consumers to secure good independent remortgage advice when seeking a remortgage deal, to help them select the best possible mortgage quote for their circumstances. Affordability is an important consideration; any property used to secure a loan may be under threat if borrower’s fail to keep up repayments.

Remortgage can happen in two different ways depending upon the ultimate goal of the home owner. The first type of remortgage is when a homeowner takes out a loan, using their property or the equity in their property as collateral, when they already have a loan on the property. The second type of remortgage is when a homeowner changes their current loan to a new lender.

The type of remortgage where the home owner takes a loan out on existing property is usually referred to as a home equity loan. The homeowner really does not own their home, the bank they have their mortgage with owns the home, and therefore the home owner can not actually use their home as collateral.

In this case though it is based on something else. Homes and property go up in value over time, so the home has equity that is building all the time. Equity is when the home and property is worth more than the amount of the original loan. For example, a person buys a home for 300,000 but it appraises at 450,000.

This person would then have 150,000 in home equity or money that belongs to them and that they do not owe the bank. They can then remortgage by using that equity amount and get a loan for the amount of their equity.

The type of remortgage that involves changing lenders is actually quite common and beneficial. It may seem useless but it really has a major payoff. Some home owners get their first loan that may have high interest or fees because they could not get a better loan due to their credit or even the current interest rates.

After a couple of years their credit is better or the interest rates have gone down and they want to lower their fees and interest. This is when a home owner would remortgage.

Usually a remortgage can not be done until the home owner has carried a mortgage two years with the current lender. This is because most mortgage agreements include early pay off penalties which allow the lender to guarantee a certain amount of income they earn off the loan.

The lender is in the business of making money and they do not make as much as they would like when a person ends their loan early. Usually, though, after two years the penalties are no longer valid and the homeowner can find a different lender with which to remortgage.

Remortgaging to get better rates can save a homeowner a lot of money. Especially if the original loan carried high interest due to bad credit.

By remortgaging a person can find a loan with lower interest which translates into not only, lower monthly payments now but less money paid in the long run. It is a great option for the homeowner who is trying to save a little on their home purchase.

Many home owners take advantage of remortgaging options. It is not hard to remortgage, which makes it an even better opportunity.