Entries in category Remortage

Remortgaging

Remortgaging as the name suggest is replacing of your old or current mortgage with a new one and is generally done to save some money. Remortgaging is possible by replacing your product with a new one from the same lender or by another competitor. However, one should remember that the money that you think may be saving by doing this can be totally eaten up wholly or partially by the charges that is associated to transferring of the loan from one lender to another. There are few tags attached to remortgage which one should know before doing so:

  • The old and the new lenders may demand from you redemption fees or some kind of reservation fees.
  • The ex-lender may charge you with a penalty while the new lender may ask for fee for making arrangements
  • The new lender may want to survey your property and hence ask for surveyor fees and even conveyance fees.

Looking at all this one should definitely do their calculation correctly to make sure that they are benefiting by remortgaging. There are reasons other than potential saving as to why someone would like to remortgage their property. Say for example, some people have taken a mortgage for a term that ends just the day they will retire or continues even after retirement. Now, people who do not have enough saving to continue their living lifestyle with their pension money and even pay their mortgage may think of shortening the length of their mortgage. On the other hand some would like to increase the length of their mortgage and can be done only by remortgaging.

The borrowers regularly check their mortgage and make sure that their current terms of the mortgage suits their current personal conditions and that if remortgaging can help him save some money. It is considered worthwhile by some homeowners and landlords to remortgage their property as it helps them save hundreds and sometimes even thousands of pounds a year. There are various sites available on internet that can help you get better deal and there are sites which can help you compare the mortgage terms from different lenders. Many sites provide mortgage calculator for free so that you can calculate all that you can save by remortgaging. If still you have any confusion there are many agents who can help you get better deal and help you save fortune on your mortgage.

Remortgaging FAQ

Remortgaging is something which allows you to make some savings on your mortgaged property. If you get a better deal, a better rate of interest to make some savings on your monthly installments, you should go for remortgaging. However, before you go for it you should know certain things about remortgaging. Mentioned below are some frequently asked questions (FAQs) to tell you more about remortgaging. If you still have some doubts or questions you can ask agents to clarify the same.

  • What is remortgaging?
    If you plan to transfer your mortgage from one lender to another it is called remortgaging. You do not buy another property but only shift the mortgage from one lender to another for a better deal.
  • Why should I think of remortgaging?
    There are many reasons as to why you can consider about remortgaging your property:

    •  To save some money on the mortgage that you currently having by transferring it to another lender who might be giving the loan at a lower rate of interest.
    • Any equity that you have on your home can be released using remortgaging. The new amount of money can be borrowed at the rate of interest same as that of the mortgage rate. This money can be used for home improvement or for payment of any other debt that you may have.
  • Which is the right time to remortgage?
    The right time to remortgage is when your current mortgage deal is coming to an end or when you are paying variable interest rates and you are getting a lower interest rate than the current one.
  • Can remortgage be done more than once?
    Yes! Anyone can mortgage their property more than once but one should be very careful with the fees and charges involved in remortgaging. The calculation should be done so that you should be getting benefit on remortgaging.
  • Can remortgaging quite often affect the overall credit or the borrower?
    Every time you apply for remortgaging it is registered in your credit file. If you apply for remortgaging quite often then the same is registered and is viewed by the lender every time they see your application. This is a concern if your application is rejected often and may deter a lender from giving you remortgage considering you a risk.

This are a few frequently asked questions and to know more about remortgaging you can ask an agent to visit you.

Remortgaging FAQ (Detailed)

When you are looking to save some money the first thing that comes to your mind is the money you paying for mortgaging your property. One of the many ways of saving is remortgaging your property for a better deal which will help you save some money. However, when you make up your mind to remortgage your property a number of questions arise in your mind. A few frequently asked questions are mentioned below and if you are still left with some questions than it is advised to consult a mortgage agent.

  • What is remortgaging?
    Remortgaging is a process in which a person transfers his mortgage from one lender to another for better. This is mostly done to save some money by transferring the mortgage to one with lower interest rate so that they can save on the monthly repayment.
  • Can a borrower mortgage more than once?
    Yes! The borrower has the liberty to mortgage their property more than once. However, you should be careful while doing it and calculate the profit that you would be getting. Every time you mortgage your property there is fees charged both by your ex-lender and the future lender.
  • Can remortgaging affect the borrower’s credit rating?
    You can remortgage your property as many times you want. Every time you remortgage your property it gets registered in your credit file. However, if you make too many applications it may be a drawback especially if it is getting rejected by many lenders. The next time you apply for mortgage the lenders may deny thinking you as a risk. It is thus advised that while remortgaging you should make wise decision.
  • I wanted to remortgage my property to interest only mortgage. What type of investments is required to run along with it?
    There are a many options of investments which include, pension, Individual savings account and an endowment and the best thing is that all of them provide tax benefits. However, most of the help that you require in this regard may be provided by your lender.
  • Is remortgage possible with bad credit history?
    Yes! You can mortgage even if you have a bad credit history and is definitely good news for you. However, to get the best deal and the lender who will provide the mortgage most favorably. They will be in the best position to help you with the right lender. However, you may have to pay an interest rate which is higher than the one who has a better credit history.
  • What all information I need to furnish to the lender if the borrower is self-employed?
    If the borrower is self-employed he will be required to provide the lender three years audited account and some may agree with just two years account. However, if you are unable to provide the same the lender would like to know the reason for the same. For newly self-employed borrower it is advised that they take help of a broker to help them get a deal as it may be difficult to find the right deal especially if you want at your own rate of interest.
  • Is remortgaging useful if the borrower’s mortgage loan amount is low?
    The loan amount does not play a very important role. The most important thing is calculation. Even if your loan amount is low and when you do the sum you find that you can do saving of your mortgage, remortgaging is definitely worthwhile. You need to weigh the cost of remortgaging and the saving that you will make if you are remortgaging your property over the term of your loan. However, sometimes it is better to stick with your current mortgage lender.
  • Can I remortgage my property for home improvement?
    Yes! It is possible to remortgage your property for some extra money if you have equity. Many people do borrow more for doing some work in their home by remortgaging. One of the benefits of this is that it may also add value to your home in the long run.
  • If the value of my home has increased how will it help in remortgaging?
    If the value of your home has increased in the long run it can help you in borrowing more of money if you want. This is termed as “equity release”. However, while doing so one should remember that the deals for remortgaging are linked to lowest loan-to-value ratio and hence it should be considered while taking up loan which is a major percentage of your property.

There will be many more questions that will come to your mind when you think of remortgaging. However, a good broker will help you get best deal and also provide answers to the entire question that may be coming in your mind.

Remortgage Definition

Remortgaging is a term used to define a process in which the borrower transfers its mortgage from one lender to another to get better deal and to save some money. Say for example you are having a mortgage from ABC financial institution and want to remortgage it to another financial institution XYZ just because they are giving you a better deal which helps you save some money. For most of the people the main reason for remortgaging is saving however, there are many other reasons for remortgaging as well:

  • To reduce the monthly repayment
  • By remortgaging you can gain some cash if your property has increased in value
  • If you are paying a variable interest rate to your current lender, you can look for a mortgage deal that will give you fixed interest rate even if it is for 2-3 years. This is best done if you know that the interest rates will increase in near future.
  • If your current mortgage does not have the facility of underpayment, overpayment or payment holidays then you can look for the one which will give you these facilities.
  • If you want money for home improvements and want money for it you can remortgage your property to release the equity.
  • If in the beginning you took an expensive mortgage deal say for bad credit file or because you were self-employed, you can remortgage your property for a better deal that will give you much more savings.

Do your calculations correct to check if remortgaging your property is beneficial? Say for example your property is for GBP 100,000 and have an SVR of 6.5%. The monthly installment that you need to pay would be around GBP 1010. If you get a new deal where SVR is 4.3% fixed to a term of 2 years then your monthly installment would be GBP 820 giving you a saving of GBP 190 per month. This would add up to GBP 4560 in 2 years’ time. Now even if the fee for remortgaging your property was GBP1000, you can make a net saving of GBP3500 which is a good amount. Hence, remortgaging can be a good way of saving your money but will have to make a wise decision. It is said the best and the cheapest way of getting a good deal and finding right financial institution to remortgage your property is through a broker.

How to Remortgage your Home

Remortgaging is a process in which a person transfers its mortgage from one lender to another for a better deal and to make some savings on the monthly repayments. The process of remortgaging is a lengthy process and may require you to follow step-wise process:

  • The first thing you should do is to get your paperwork at one place. If you planning for remortgaging then you should start thinking about it at least 5 to 6 month before your old mortgage deal ends. Doing the paperwork correctly will help you know how much you currently paying on your mortgage and what will be the right deal to remortgage the property.
  • The most important thing to know before you remortgage your property is to know how much will it cost and what will be the benefit of it. The important things to look for is any terms and conditions which apply after your current mortgage deal ends, the exit fee charged by your current lender and the rearrangement fee that the new lender will ask for. Calculate the cost and the profit that you will have when you remortgage your property.
  • You should not just assume that your ERCs will end with end to your discounts or fixed rates. Sometime the loans have additional tie-ins which may ask you to pay lenders SVR for another set of period.
  • The next step would be to look into your factsheet to check for the deal which will suit your remortgage terms and conditions and also things like fixed rate, variable rate and tracker etc. There are various sites which provide comparison of different lenders and their deals. You can also check the financial pages of leading newspapers.
  • You should workout the fees that are involved in remortgaging your property. There are a few lenders who may work out on the legal and valuation costs but the rate of interest may be high on the same. Similarly the total cost of remortgaging can be considered under the loan but you should remember that interest will be levied on the same as well.
  • It is advised that once you have chosen your deal for remortgaging, you can ask your current lender to match it and if he agrees it may save you time, hassle and money.
  • The next step would be to apply for the new deal
  • Last but not the least, wait for the new lenders reply.

Debt Restructuring

Debt restructuring is a process in which the public, private companies and even sovereign entities who are facing problems in cash flow or going through any financial distress. These people can negotiate their debt amount and reduce the repayment amount so that the liquidity can be restored and they can be rehabilitated and continue with their operations. However, one should be clear about debt restructuring, refinancing and workouts. Refinancing is the replacement of your old debt by a new one when one is not under any financial distress. Restructuring if it occurs out of court it is referred to as workouts and is becoming very popular now a days.

Debt reconstructing is considered a safe alternative to bankruptcy and is also very less expensive. The client’s time and effort is required to negotiate with the banker, vendors, creditors and other tax authorities. The restructuring of debt involves reduction in the debt and also an extension in the terms of payments. There are several debt restructuring companies available all over UK and they help the companies in coming out of bankruptcy.

The services provided by most of the companies will include:

  • Most of the companies allow you to make them single payment every month which will be distributed to all the creditors to manage your debt well.
  • Most of these company persons are expert in their job that is debt restructuring.
  • They are the one who will calculate your debt and also let you know the exact time when you will become debt free.
  • They will check upon your debt and provide you with the best restructuring program which will deal with your issue individually.
  • The debt restructuring program will help you release the pressure that you often get from your lender and they do this by liaising with your lender either directly or on your behalf.

Some debt restructuring program includes:

  • Debt for equity swap – In this the creditors of the company allow or agree to cancel a part of the debt or all of the debt in exchange to some equity in the company. This is generally done in case of large companies who run into any kind of financial trouble.
  • Some of the companies go for informal debt repayment, an agreement for the same allows the clients to pay their debt in installments if they cannot pay at one go.

Debt Management

Debt can be a cause of many of your worries. If you are worried of your personal debts and require help for the same, it is available through many debt management agencies throughout UK. These debt management companies checks upon your financial situation and then suggest you the best available options. Many of these companies also provide online remedy to these conditions through some tool.  One of the main aims of these companies is to help you enough money so that you can take care of your daily expenses as well pay off your debt. Many people in UK have been helped by the debt management plans to resolve their debt issues.

The debt management plans are designed in such ways that it helps you pay reduced payment of your debt based on your affordability to pay them. If one of the debt management plans is good enough to suit your circumstances the company will allow you to have them or get it arranged for you.  Most of the companies gives you the facility to make one payment to them and then they distribute that to the various creditors. Most of them do not charge any fees for the services or the advice that they provide and hence every penny that you pay them helps in reducing your debt.

In debt management programs though you may be able to convince and negotiate with your creditor for a lower repayment option over a considerably longer period but they are not legally bounded to do so. So, if you have any such legal actions pending it is better to withdraw them as in the long run is going to affect you as the interest gets accumulated. It is advised to take an impartial suggestion from someone to know if debt management in your case is useful.

There are mainly two types of debt management plans:

  • Fee Charge- In this the company charges a fee of about 10% to 15% of your monthly payment as a service charge. The companies doing this justifies the fees taken by saying that the service provided by them is of superior quality which helps manage debt better than those not charging any fees and the amount taken will definitely justify the additional cost incurred.
  • Non-fee charge – They do not charge any fee and the whole money that you pay goes towards paying your debt and it helps in early repayment of your debt than the fee charging companies.

Debt management Plan

Debt can be a cause of worry as well as your financial problems. Managing debt is very important and essential to live a peaceful life. There are many debt management associations that help people manage their personal debt better. Most of the debt management companies provide their client with options which best suit their conditions and also help in clearing their debt as early as possible. Though some of the debt management companies charge some fees for managing your debt claiming that their service is better, there are many who provide this service for free and also have no hidden charges.

The debt management plan is conducted by a debt management company or charity which is allows you to pay reduced monthly payment for your debts. This is beneficial for all the people who have to pay a contractual debt along with expenses for their day to day living. In this case the third party person contacts the creditor and agrees it to accept the reduced payment for a longer period of time. You only need to pay one payment in a month and they will only divide that amount among all your creditors.

The debt management plans are of two types:

  • Fee charging in which the debt management service is not for free and they charge 10 to 15 percent of the monthly payment that you make to them. They argue that their services are better and the money that they charge is worth it.
  • Free debt management plan services is one in which they provide this service for free and they help pay your debt much earlier than those who charge you fees for the same.

The companies and charity provide you with monthly statement showing you the way they have managed your payment to different creditors. You also will be provided with internet access to check with your debt and the way it is being managed and also view the satatement. However, not every debt can be managed but many companies do search for the best possible plan for you and provide you the best alternatives. If you think that you debt can be managed using debt management plan search for the right company or charity whichever suits your budget and then have a sigh of relief. Debt management can be done by you also if you can negotiate with your creditor for a reduced payment.