SimplyFinance - Remortgage

The Remortgage Process

2007-07-26T23:00:00Z

The remortgage process does not involve getting a second mortgage or moving to a different home. In essence, a remortgage is when you replace your original mortgage with another from a different lender in order to get low remortgage rate. Remortgaging is fairly simple, and it should not be any more complicated than it was to obtain your original mortgage. The lender you choose will offer you remortgage advice, they'll go over your application, and they will ask you for necessary paperwork. The paperwork required usually includes proof of income, expenditures, and debts.

When you are looking to remortgage, often a home valuation needs to be done in order to determine if the value of your property has increased or decreased since you applied for your original mortgage. Your home’s value may have increased due to changing property markets, home improvements, or home additions. In most cases, the valuation for remortgage is less intensive than for an original mortgage. The surveyor will look at the outside of the house, and they will ask a few important questions. In some other cases, a full inspection will need to be made. Your lender may charge you a valuation fee to cover this expense. In addition, you may be charged legal fees and loan processing fees during the course of remortgaging.

Generally speaking, the remortgage process should take anywhere from four to six weeks to complete. Depending on the lender and the circumstances surrounding your specific loan and property, this time frame could be longer or shorter.

Once your paperwork has been reviewed and a credit check has been done, your remortgage broker will search the available remortgage packages to find the best remortgage rate for you. The remortgage rate you'll be given will be based on the amount of money you are asking for, the value of your home, and your credit score. Depending on the remortgage lender, there may be more factors taken into consideration, but generally speaking, these are the things that influence the remortgage rate you're offered.

If you'd like help finding the best remortgage rate and remortgage plan for you, take a minute to fill out out short questionnaire, and a SimplyFinance representative will contact you soon to introduce you to a UK remortgage broker who will offer you all the remortgage advice you need. Your broker will work and search to find the best remortgage rate for you.

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Lower Fees Demanded in the Face of Declining Mortgage Approval Numbers

2008-06-26T23:00:00Z

On Tuesday, the British Bankers Association reported that home loan approvals declined from 34,752 in April to 27,968 in May. This May's number is 56.1% lower than the same time last year, and it's the lowest number of mortgage approvals since 1997, when the BBA started recording data on the topic. This upcoming Tuesday, the Bank of England is releasing their report on the topic of mortgage approvals, and the numbers are expected to be even lower due to the wider range of lenders that are surveyed by the BoE. Their data currently shows that the number of approvals has been halved since the end of 2006.

Economist Michael Hume of Lehman Brothers said, "A US-style housing slump looks increasingly likely." He added that the housing market was, "rapidly grinding to a halt under the pressure of higher mortgage interest rates, tighter bank lending standards, and declining confidence."

Despite all the financial turmoil in the housing market, experts believe that policy makers will hold off taking action until there is a severe negative impact on consumer spending. A negative impact of the housing market is starting to be seen in by the credit card industry. During the 18 months prior to May 2008, the amount of credit card payments being made by consumers topped the amount being charged to the cards. However, as of May, net credit card spending had risen to £550 million, a drastic increase over previous months. This increase has led experts to conclude that consumers are really starting to feel the burden of a higher cost of living.

Prompted by the latest data on mortgage approvals, and in an effort to ease the burden on mortgage borrowers, Chancellor Alister Darling has requested that banks scale back their arrangement fees, which have been seen in amounts of up to £3000. Darling said that if banks don't comply with his request, he will ask the Financial Services Authority (FSA) to step in and take action. He feels that home loan borrowers are being taken advantage of by banks, especially those borrowers that are remortgaging after the fixed term of their previous mortgage had expired.

The Council of Mortgage Lenders (CML) said that lenders require high arrangement fees on loans with low interest rates and vice versa, so technically, it's up to the borrower when it comes to the amount of fees they pay.

What does this mean to you, the borrower or the potential borrower? It means that you need to have your budget in mind before you go in to secure a mortgage or a remortgage loan. Know exactly how much you can afford to repay each month, including fees. This way, you will have a solid number in mind, and you'll be less likely to be swayed by lenders, and you'll be less likely to find yourself tied into a mortgage loan that you can't afford.

Considering the higher difficulty in securing a mortgage, your credit needs to be as good as possible before you try to find the right mortgage loan. Keep an eye on your credit report, and be sure that there are no mistakes on your report that could lessen your credit score. Mistakes aren't uncommon, so it's a good idea to keep tabs on your credit report.

The mortgage market doesn't look good, but it's not impossible to find the right mortgage loan for you. Do your research, keep an eye on your credit, and know your financial limits.

Types of Remortgages

2007-08-15T23:00:00Z

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.

CLICK HERE TO APPLY FOR A REMORTGAGE TODAY