Remortgage And Retain The Best Terms For You
A remortgage usually occurs when a homeowners original mortgage deal comes to an end. The borrower tends to want to shop around for the best new deal, because if they do not, then their mortgage reverts to the original lenders Standard Variable Rate (SVR) which is often inferior to other rates. Sometimes the SVR is quite competitive, which discourages obtaining a remortgage, and if a property has not amassed sufficient equity then a remortgage may not even be possible, because lenders increasingly want a minimum of 20 per cent.
However, for homeowners with sufficient equity, remortgaging can be very advantageous and save up to hundreds of pounds every year through better interest rates. A remortgage can also help to release equity in a property or consolidate debts.
Some homeowners take out a remortgage even before their current deal has ended in order to save cash on their monthly payments. This process can bring with it its own costs though, as some lenders impose penalty charges if you leave their mortgage before time and the new deal will involve paying for things such as another home survey.
Given the current economic climate, with lenders still being very careful in the wake of the credit crunch, there are not as many remortgages available as there were a few years ago. The ones that are available require a smaller loan-to-value (LTV), which is the sum lent as a percentage of the propertys total value. Most lenders are typically offering an LTV of 80 per cent; so many homeowners will have to wait until they have built up the required amount of equity.
The simplest way to obtain a remortgage is to go with the existing lender. In most cases, the lender will be in touch shortly before a borrowers current mortgage expires anyway to discuss their options.
It is also important to remember that lenders increased caution means that they are not likely to be offering as favourable rates as they were before the credit crunch struck. There are still plenty of good offers out there and it only requires a bit of detective work to track them down.
A good bet is to enlist the services of a professional mortgage broker, who can devote their time to finding the best remortgage deal for you and who will also be able to find you financial products that are not directly available to the public. Under the Financial Services Authority code of conduct, brokers are bound to find the right deal for a particular borrower and are not allowed simply to recommend products which are solely to their own advantage.
However, for homeowners with sufficient equity, remortgaging can be very advantageous and save up to hundreds of pounds every year through better interest rates. A remortgage can also help to release equity in a property or consolidate debts.
Some homeowners take out a remortgage even before their current deal has ended in order to save cash on their monthly payments. This process can bring with it its own costs though, as some lenders impose penalty charges if you leave their mortgage before time and the new deal will involve paying for things such as another home survey.
Given the current economic climate, with lenders still being very careful in the wake of the credit crunch, there are not as many remortgages available as there were a few years ago. The ones that are available require a smaller loan-to-value (LTV), which is the sum lent as a percentage of the propertys total value. Most lenders are typically offering an LTV of 80 per cent; so many homeowners will have to wait until they have built up the required amount of equity.
The simplest way to obtain a remortgage is to go with the existing lender. In most cases, the lender will be in touch shortly before a borrowers current mortgage expires anyway to discuss their options.
It is also important to remember that lenders increased caution means that they are not likely to be offering as favourable rates as they were before the credit crunch struck. There are still plenty of good offers out there and it only requires a bit of detective work to track them down.
A good bet is to enlist the services of a professional mortgage broker, who can devote their time to finding the best remortgage deal for you and who will also be able to find you financial products that are not directly available to the public. Under the Financial Services Authority code of conduct, brokers are bound to find the right deal for a particular borrower and are not allowed simply to recommend products which are solely to their own advantage.
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