Mortgages and remortgages along with secured loans are all types of loans that are secured on property. Therefore these financial products are only available to those who own their own home, and are not in rented property..
A remortgage, as the prefix clearly states, is the redoing of something and in the case of a remortgage it is the rearranging of a current mortgage.
A remortgage is a home loan that takes the place of an existing mortgage.
Remortgages and mortgages are based on the equity of a property , and equity is the difference between the value of a property and the mortgage balance. This means that if a property is worth 300,000 and the mortgage balance or the required remortgage is 150,000 the available equity is 150,000.
Before the credit crunch there was availability of 100% mortgages and remortgages with the Northern Rock advancing 125% mortgages which helped towards their downfall.
Many out there may think that the 125% mortgage is back with the announcement a few months ago by the Nationwide that they are advancing 125% mortgages. This is not available to other than existing Nationwide customers trapped in their current property by negative equity who need to buy another place to live.
If they owe more on their existing mortgage than the house is worth they can obtain a mortgage on their next property of 125%.
Now although most mortgage lenders are more comfortable to lend at 75% LTV or even less a few grant mortgage and remortgage advances of 95% with a few more lending up to 90%.
The most important feature lenders consider now after status is the equity in a property,and interest rates for both mortgages and remortgages are available at 1.98% at a maximum LTV of 60%.
Another major difference pre and in the middle of the recession is the situation regarding pure self certifications of self employed earnings. Only two building societies even consider self declarations now, but even at the last minute they may require further income proof in official format.
Before the recession many mortgage lenders accepted self certifications of income, and this is in fact caused much of the financial woes, as sub prime mortgages were advanced to those who in reality could never afford to make the repayments.
This were certainly vey lax before, but on the other hand they are perhaps a bit too strict now.
Learn more about rmortgages then vist Champion Finance’s site to ascertain the best choice of remortgage for your needs.
categories: refinancing,real estate,home loans,remortgages,secured loans,mortgages,home improvements