With over a million UK householders reaching the end of their fixed rate mortgage deals this year the market for remortgages should be heating up. Instead, the market has cooled as the effects of the global credit crunch slowly erode the confidence and profits of UK mortgage lenders.

Borrowers with mortgage products that contain fixed or discounted interest rates which were issued two to three years ago face a situation in which they must remortgage or face a huge rate shock this year. Such mortgages are due to revert to the lenders’ Standard Variable Rates which can mean an increase of around two percent to the interest rates attached to the products. This can increase the monthly mortgage payments due by hundreds of pounds – unaffordable to many households.

Home owners in this situation are therefore virtually forced to remortgage this year. Ordinarily this would lead to lenders offering all kinds of sweeteners to secure their business, such as reduced interest rates and low entry fees on their remortgages. Instead, due to the credit crunch, frontline lenders are reluctant to take on new business from most types of borrowers and are not offering incentives. In fact the situation is reversed with lenders pulling products from the market that were once suitable for remortgages and tightening the criteria on the mortgages that remain available.

In order to ensure that home owners secure a good deal on their remortgage – or find a deal at all – planning ahead is encouraged. Final mortgage offers from lenders are usually valid for several months meaning that borrowers can begin to search for remortgages, and even apply for them, months ahead of the time in which their current deal expires. Home owners should also not restrict themselves to mortgage brokers and should actively contact lenders by themselves to research products suitable for remortgages which may not be available through intermediaries. Additionally, home owners should check best buy tables on financial websites. It should be noted, however, that the products on top of the league tables can be extremely popular and may only be available for a short time.

Another tip for finding a good remortgage product is to reduce the loan to value ratio required. Mortgages that were one available with high loan to value ratios are disappearing fast which may leave some home owners in the lurch if they have not paid off some of their home loan. Existing borrowers should therefore attempt to reduce their mortgage balance before they apply for remortgages in order to increase their chances of securing a favourable deal.

Finally, borrowers should carefully weigh up the real cost of a discounted or fixed rate against a variable rate home loan. Remortgage products with favourable interest rates often come with high application fees so the borrower may not be better off over the term of the discount period due to the high entry fee. It may be worth paying a low entry fee for a tracker rate mortgage, for example, and taking on the risk of future interest rate rises. The current trend of the Bank of England Base Rate is downward and many analysts and brokers are predicting that it will remain historically low in the immediate future.

If you have bad credit you can still benefit from remortgage. Perhaps you also had bad credit when you applied for your original mortgage. Those who have bad credit history are usually charged higher interest rates than those with good credit. Lenders do this to help cover their risk of lending to you. Many people who have bad credit pay a higher interest than necessary. If you have bad credit, you may want to remortgage. You can take your time and shop around for the best interest rate available to you. It is highly possible that you can find an interest rate that is lower than what you are paying now.

When people remortgage they often use money to do home repair and remodels to their houses. In doing so, they can even add more equity to their homes. Money can be used to go on vacation or to buy a new car. Someone might also remortgage their homes so they have some money for their children’s education.

Since you already have bad credit you may be at a disadvantage in the mortgage industry, but you are not ruled out from playing the game. Some predatory mortgage lenders may be looking for those with bad credit to take advantage of them, so you need to know the obtaining process of Bad Credit Remortgage Loans.

Lenders who offer individuals bad credit remortgage loan want to see whether you have paid your credit properly, or if there have been any default or arrear. If you are applying for bad credit remortgage the chances are that you will have some form of impaired credit history, so this on its own should not prevent you from getting bad credit remortgage loan.

The more adverse your circumstances, the higher the loading the lender will apply to your bad credit remortgage loan. Many of the bad credit remortgage products are offered through intermediaries. In order to take advantage of the borrowers’ financial conditions, great influx of lenders have invaded the loan market. Owing to stiff competition amongst lenders affects the bad credit remortgage loan rate. And borrowers find this situation apt to deal in bad credit remortgage loan.

Before we dive into types of remortgage loans, it’s important to understand the basics of what a remortgage is. A remortgage is a type of transaction where the homeowner chooses to switch mortgage lenders, but they will stay in the same property as in the first mortgage. People opt to remortgage when they want to save on repayments or if they want an influx of surplus funds. Those who have gone through a new mortgage application may find that the application for remortgage is remarkably similar, yet slightly more simple and less time consuming.

Types of Remortgages

Remortgages generally fall into three categories: fixed rate, discounted rate, and variable rate. With a fixed rate, your payments will be set for a certain length of time. During this period, your payment rate will not fluctuate up or down, but it will stay at the same level. Once the predetermined fixed-rate period is over, the loan will then adopt a variable rate. A discounted rate remortgage is like a variable rate mortgage, but it differs in that the lender offers you a discount on your interest rate. Thus, your payments will be reduced for a certain length of time, but your payments are still influenced by the fluctuations in interest rates. A discounted rate remortgage becomes a variable rate remortgage once the discounted period is over.

A variable rate remortgage makes it fairly difficult to predict what your monthly payments will be since the interest rate fluctuations will determine the amount you have to pay each month.

Benefits of Each Type of Mortgage

A fixed rate remortgage is good because the fixed rate protects you from any upward fluctuations of the interest rate. However, do not expect to be benefited if the interest rate goes down. This type of remortgage is apt for thrifty borrowers who plan loan payments carefully. Such borrowers want the security from interest rate fluctuations that a fixed rate remortgage guarantees.

A discounted rate remortgage is advantageous for those who appreciate lower initial payments, and for those who want to pay lower interest rates when the interest rate decreases. Bear in mind that when you possess this type of remortgage, your payments go up as interest rates go up.

A variable rate remortgage generally benefits people who want their payments to go down when interest rates fluctuate downwards, but are willing to pay more when interest rates go up. A variable rate remortgage borrower does not want to be tied into a fixed interest rate in the case that the base rate decreases.One thing you have to remember, regardless of which of the type of remortgages you choose, is that there will be fees for a new survey of your home to determine the value. In addition, there will be arrangement fees, broker fees, legal fees, etc. to deal with.

Types of Remortgage Borrowers

Just like there are different types of remortgage loans, there are also different types of borrowers (good and bad credit borrowers). A good credit borrower is someone who can guarantee that he can shoulder the payments for any of the three types of remortgages. Conservative lenders may limit their market to this type of borrower.

On the other hand, the more daring remortgage lenders may opt to issue any of the three types of remortgages to people with poor credit ratings or bad credit history. Bad credit remortgage lenders will know whether you have poor or negative credit because all lenders conduct a credit check on UK borrowers. They will be looking for evidence of defaults, IVAs, debts, bankruptcy, the credit history proper, mortgage arrears, defaults and CCJs. A negative credit rating could result from factors that are out of your control, such as a divorce, a severe illness, an accident that left you unable to work, and other such things. In such cases, the lender may be willing to accommodate your application and give you a bad credit remortgage. It is important that you provide all the information needed by the lender so that your remortgage application will be considered with care.

It is necessary to get remortgage advice before you choose a loan for your situation, advice such as that given here about the types of remortgages available. You should know that a remortgage is not final. You may switch to other types of remortgages if you decide that a different type of loan will be more financially advantageous. So get to know the types of remortgages in greater detail before you sign on the dotted line.

If you’d like help finding the best fixed rate remortgage, variable rate remortgage, discounted rate mortgage, or bad credit remortgage, take a moment to fill out our short form, and one of SimplyFinance’s representatives will contact you and help you on your way to finding the best remortgage lender for you.

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The big UK mortgage lenders have cut their rates - fantastic news for consumers. It is even possible to pick up a mortgage below 5% for two years, but make sure you check the fees first.

There is a new incentive for those who will be remortgaging, as opposed to first-time buyers, when their current mortgage arrangement finishes. As the market leaders have started to cut their rates the fixed rate mortgage has generated more interest as the gap between these rates and the standard variable rate (the rate that a customer reverts to once their fixed rate deal finishes –and is usually the highest rate a lender has) has grown.

As lenders reigned in their lending when the credit crunch bit the fixed rates available on the market crept up while the standard variable rates (SVR) remained about the same as the Bank of England base rate was kept at the same level for several months. Now as the fixed rate mortgage offer rates are much lower than the SVR’s it is worth searching for a remortgage deal.

For those who have large deposits or those with a good amount of equity in their property which will be a great number of people, now is definitely a good time to explore the fixed rate mortgages on offer and are likely to find a decent rate fixed for two or three years. Using a mortgage broker who will search the whole market will ensure you are getting the best deal, possible one of the following offers.

As we mentioned at the beginning the fees associated with taking on a new mortgage are high, arrangement fees have risen 20% in the last year.

Cheltenham & Gloucester’s two-year fixed rate is 5.65% but comes with a whopping £2,094 fee. Despite the large fee the rate is much lower than was on offer two months ago.  C&G also offer a 5.75% rate with a lower fee of £1,094.

The lender with the biggest market share, Abbey, has also cut their rate. They are offering a two year fixed rate of 5.89% with a fee of £995 for those who have at least 30% equity in their home or 5.99% with the same fee for those with 25% equity.

These much improved rates offered by two of the big lenders as well as Halifax, Woolwich and Nationwide will be welcome news to consumers. The major lenders have certainly started the ball rolling and the smaller lenders are started to follow as they have little choice in order to remain competitive.

Yorkshire Building society has a couple of interesting offers, a very attractive 5.54% loan and a fee of £895 for those with 25% equity or a deposit and a very enticing rate of 4.89% fixed for two years however comes with a fee of 2.5% of the loan amount. Those with lower mortgages can certainly benefit from this mortgage deal.

The mortgage market is certainly heating up again and with more lenders offering more and better rates many looking to remortgage can save hundreds or maybe thousands of pounds by changing mortgage lender when their existing deal comes to an end.