Getting a remortgage
January 28, 2009 by admin
Filed under Remortgage Articles
If you are thinking of getting a remortgage click here
Getting a remortgage is one of the biggest financial decisions you will have to make. As with a new mortgage, it’s a big financial commitment - but when it comes to remortgaging, it’s possible to save yourself a lot of money each month compared with your existing mortgage agreement.
Why do people remortgage?
End of existing mortgage deal
Most mortgage deals offer special terms that usually last a few years before reverting to the lenders standard variable rate, and once those terms are up, it’s time to remortgage.
You can either remortgage with your existing lender, or with a new lender. The most important thing for you will probably be finding the mortgage deal with the lowest interest rate in order to keep your monthly payments as low as possible.
Debt consolidation remortgage
If you are in debt, you can also use a remortgage to help repay those debts. A debt consolidation remortgage involves withdrawing some of the equity in your home (e.g. any deposit, payments you have made and any increase in your home’s market value) and using it to pay off your debts. You will then repay the borrowed amount on top of your regular mortgage payments.
Tips for getting a remortgage
If you are looking for a remortgage, it’s sensible to take a few simple steps to improve your chances of getting the best deal.
1. Check your credit history
Your credit history is a record of all your credit activity over the past few years. When you apply for credit (including a remortgage), the lender will assess your credit history, based on their own lending criteria, to decide whether or not they can lend you the money.
However, mistakes can sometimes occur - and it’s important to ensure that your credit history is up to date and free of errors in order to give the best account of your credit activity.
All the major credit reference agencies (Equifax, Experian and CallCredit) offer online credit check facilities. If you find any errors on your credit file, all you need to do is call the creditors concerned and ask to have the entry corrected.
2. Take your time
It’s important to give yourself adequate time when looking for a remortgage. Don’t leave it until the last few weeks. Two or three months should be enough to get a reasonable idea of the range of mortgage deals on offer, and where to find them.
Some lenders will allow you to ‘reserve’ your mortgage deal a few weeks in advance - so you shouldn’t have to worry about the best deals being taken off the market shortly before you start your new terms.
3. Get professional mortgage advice
It’s possible to search for a remortgage on your own, but a lot of people prefer to get help from a professional mortgage adviser. Speaking to a mortgage adviser about finding a remortgage can greatly reduce the time and effort involved in finding the best remortgage deals.
A mortgage adviser will be happy to give you free, impartial advice on your remortgage, and may be able to help you find the best deal for your circumstances.
If you are thinking of getting a remortgage click here
Alternatives to Remortgages
January 18, 2009 by admin
Filed under Mortgage Articles
Remortgages are carried out by home owners who want to release the equity in their home and apply for a new mortgage at the same time. Remortgages can either be carried out with the same mortgage lender that the borrower has their existing mortgage with, or with a different lender altogether.
All remortgages that release equity will result in the balance of the new mortgage being higher than the balance of the old mortgage. The old mortgage is paid off with the funds from the remortgage and the excess is given to the borrower and will represent the amount of equity that has been released.
While remortgages are extremely popular in the UK, there is an alternative method of equity release that will not require the home owner applying for a new mortgage and redeeming their existing one.
Second mortgages are a popular and effective alternative to remortgages. Second mortgages are also known as secured loans and are loans that are secured against the equity in the borrower’s home.
Instead of applying for a brand new mortgage, the borrower will keep their existing mortgage and secure a second mortgage against the releasable equity in their property. As opposed to remortgages, second mortgages must be issued by a different lender to the lender that issued the existing mortgage.
Both remortgages and second mortgages options have advantages and disadvantages.
Because second mortgages are similar to personal loans in that they are issued for a shorter term than remortgages, they can be the most sensible option when the finance is required for a short period of time.
However, remortgages can involve paying large application and brokerage fees. The longer the time period you stay with the mortgage the more value you will receive out of paying for those fees.
Second mortgages usually incur smaller fees than remortgages. There is no need, therefore, to keep the second mortgage active for a long period of time to gain some pay-back from any fees that may be incurred in securing the loan.
Some second mortgages also offer facilities such as a cheque book and ATM card for draw downs, and a deposit book for making repayments.
Not all second mortgages offer such options so it is advisable to shop around if you require them. Also keep in mind that extra fees may be incurred so ensure that you actually require the extra facilities before signing on the dotted line.
If you require any advice on remortgages, contact an independent mortgage adviser for help.