If the value of your home has risen significantly since you took out your mortgage – and, frankly, whose hasn’t over the past few years – you might be tempted to remortgage to free up some of that cash.
You could clear credit card or personal loan debts – or enjoy spending it on home improvements, a new car or a fabulous holiday.
With so many mortgage lenders competing for business, provided you’re up-to-date with your repayments and your financial situation hasn’t deteriorated markedly, you should have no difficulty finding one willing to offer you a larger loan.
Chances are you will even be able to get it at a lower interest rate than you are paying now.
If you have a particularly good deal with your existing lender, and it’s keen to keep your business, you might simply be able to increase your current loan, avoiding the hassle and cost of remortgaging.
But however you go about it, the end result is that you will owe more, so think very carefully before committing yourself.
To help you decide if it really is worth increasing your mortgage, read The dangers of remortgaging to free up cash.
Source
Monday, June 22, 2009
Monday, June 15, 2009
Why remortgage?
The simple reason is because it will save you an absolute fortune. Cutting 1% off a £100,000 mortgage will cut your costs by around £80 a month. Remortgaging is the biggest single money-saving activity possible, the financial equivalent of liposuction. Take the plunge and the pounds will slip off straight away.
The reason for a printed guide is because remortgaging is just too large a subject for an online version. It's something you need to sit down, read through and take some time over. After all a mortgage is likely to be your biggest single expense and therefore getting the remortgage right offers the biggest single savings.
Does the credit crunch change anything?
The guide was printed before the Credit CrunchThe Credit Crunch
This is the name given to the current phenomena that banks and other big financial institutions are struggling to find money to borrow. As they can’t find money to borrow they’ve less to lend out, which means the cost of debt is increasing, and its availability is decreasing. In other words it’s getting more difficult and more expensive to borrow.
Close , all the information in it holds true though. The main difference is that where once mortgage companies were fighting for business; now many don’t want it. It’s tougher to get a new mortgage deal and tougher still to get a very cheap one. This makes it even more important that you follow through the guide to understand how mortgage deals work before trying to find the right one for you.
Source
The reason for a printed guide is because remortgaging is just too large a subject for an online version. It's something you need to sit down, read through and take some time over. After all a mortgage is likely to be your biggest single expense and therefore getting the remortgage right offers the biggest single savings.
Does the credit crunch change anything?
The guide was printed before the Credit CrunchThe Credit Crunch
This is the name given to the current phenomena that banks and other big financial institutions are struggling to find money to borrow. As they can’t find money to borrow they’ve less to lend out, which means the cost of debt is increasing, and its availability is decreasing. In other words it’s getting more difficult and more expensive to borrow.
Close , all the information in it holds true though. The main difference is that where once mortgage companies were fighting for business; now many don’t want it. It’s tougher to get a new mortgage deal and tougher still to get a very cheap one. This makes it even more important that you follow through the guide to understand how mortgage deals work before trying to find the right one for you.
Source
Monday, June 8, 2009
Q&A: Moving your mortgage
Thousands of people switch mortgage provider each year, some to save money, others as a means to borrow more cash.
What factors should you bear in mind when switching mortgage providers.
Can remortgaging really save money?
It depends.
It is estimated that more than half of all borrowers are continuing to pay over the odds for their mortgage each month.
Usually these people are paying the lender's standard variable mortgage rate. There will be lower rates available from other providers.
But this is not the whole story.
In recent years, banks and building societies have been hiking mortgage fees to subsidise attractive headline interest rates.
So called mortgage arrangement fees have sky-rocketed as have charges for redeeming a mortgage.
As a result, you have to do the sums to make sure that what you gain through switching provider - a lower rate of interest - is not lost through higher charges.
That sounds very complex, what help is available?
There are financial professionals who can advise you. Some of these are employed by lenders and may only be able to recommend the products of one mortgage provider or a small panel of providers.
A financial adviser may not be the best route to a future mortgage deal.
But there are a host of independent mortgage brokers who are free to advise you from the whole of the mortgage market.
However, be aware that they may take commission from the provider they recommend to you.
You may also have to pay a fee for independent mortgage advice.
It is also wise to do your own research to compare the rates that a lender or broker is offering you.
Source
What factors should you bear in mind when switching mortgage providers.
Can remortgaging really save money?
It depends.
It is estimated that more than half of all borrowers are continuing to pay over the odds for their mortgage each month.
Usually these people are paying the lender's standard variable mortgage rate. There will be lower rates available from other providers.
But this is not the whole story.
In recent years, banks and building societies have been hiking mortgage fees to subsidise attractive headline interest rates.
So called mortgage arrangement fees have sky-rocketed as have charges for redeeming a mortgage.
As a result, you have to do the sums to make sure that what you gain through switching provider - a lower rate of interest - is not lost through higher charges.
That sounds very complex, what help is available?
There are financial professionals who can advise you. Some of these are employed by lenders and may only be able to recommend the products of one mortgage provider or a small panel of providers.
A financial adviser may not be the best route to a future mortgage deal.
But there are a host of independent mortgage brokers who are free to advise you from the whole of the mortgage market.
However, be aware that they may take commission from the provider they recommend to you.
You may also have to pay a fee for independent mortgage advice.
It is also wise to do your own research to compare the rates that a lender or broker is offering you.
Source
Monday, June 1, 2009
What is remortgaging?
Remortgaging is when a borrower who already has a home loan with one lender switches it to another one.
The practice was relatively rare until 15 years ago, when lenders mostly offered only basic variants of variable rates.
The assumption was that borrowers would simply stick with their existing mortgage for its full duration.
Competitive market
But in the early 1990s, as property prices fell and the market was in the doldrums, mortgages became much more competitive as lenders realised that the only way to win new business was to battle for each other’s existing borrowers.
Thereafter, lenders also found themselves competing for business among new homebuyers, offering ever more sophisticated deals.
Initially, they tried to keep their borrowers by tying them to heavy redemption penalties, sometimes stretching for years after the special deals that first attracted them came to an end.
Today that practice is largely non-existent, with most penalties applying only for the lifetime of the deal itself.
Meanwhile, some 40% or more of all new loans in the UK each month are remortgages.
Source
The practice was relatively rare until 15 years ago, when lenders mostly offered only basic variants of variable rates.
The assumption was that borrowers would simply stick with their existing mortgage for its full duration.
Competitive market
But in the early 1990s, as property prices fell and the market was in the doldrums, mortgages became much more competitive as lenders realised that the only way to win new business was to battle for each other’s existing borrowers.
Thereafter, lenders also found themselves competing for business among new homebuyers, offering ever more sophisticated deals.
Initially, they tried to keep their borrowers by tying them to heavy redemption penalties, sometimes stretching for years after the special deals that first attracted them came to an end.
Today that practice is largely non-existent, with most penalties applying only for the lifetime of the deal itself.
Meanwhile, some 40% or more of all new loans in the UK each month are remortgages.
Source
Monday, December 15, 2008
Mortgages Support the Banking Industry
Recent news from the Bulgarian banking sector confirms what many property investors have known for a while – investment potential in Bulgarian property is one of the best in the world. Not only does capital growth top global rankings, but the Bulgarian mortgage sector is booming. There is no doubt that the Bulgarian banking industry is growing at a rapid pace on the back of rising housing and property mortgage loans and a strong real estate sector. RNCOS, a leading market research company has released a new research report on the Bulgarian banking sector, which says that increase in mortgage loans is one the fastest growing markets for the Bulgarian banking industry. Indeed, the industry is expected to grow at a Compound Annual Growth Rate (CAGR) rate of around 88% over the next three to four years.
According to the report, the Bulgarian housing mortgage loans experienced high growth in recent years at a CAGR of nearly 87% from 2004 to 2006 due to liberalisation of the mortgage market, coupled with lower interest rates that made mortgage loans hugely popular in the country. Bulgarian National Bank figures report that Bulgarians took out over €2.5 billion in mortgages over the last year and home loans now account for almost half the loan total (a rise of nearly 25% over the last 3 years).
Source
According to the report, the Bulgarian housing mortgage loans experienced high growth in recent years at a CAGR of nearly 87% from 2004 to 2006 due to liberalisation of the mortgage market, coupled with lower interest rates that made mortgage loans hugely popular in the country. Bulgarian National Bank figures report that Bulgarians took out over €2.5 billion in mortgages over the last year and home loans now account for almost half the loan total (a rise of nearly 25% over the last 3 years).
Source
Monday, December 8, 2008
Homeowners' development rights "could evaporate"
The permitted development rights of homeowners could "evaporate" under the new reform posed by the government, one sector commentator has claimed.
In news that may be of interest to those seeking to re-mortgage, Simon Smith, a permitted development expert and chief executive at Betternest, was responding to Article 4 directives, which are issued by a local council in circumstances where specific control over development is required.
According to Planning Portal, permitted development rights allow homeowners to make certain types of minor changes without needing to apply for planning permission, but are partly removable by the local planning authority by issuing an Article 4 direction.
Source
In news that may be of interest to those seeking to re-mortgage, Simon Smith, a permitted development expert and chief executive at Betternest, was responding to Article 4 directives, which are issued by a local council in circumstances where specific control over development is required.
According to Planning Portal, permitted development rights allow homeowners to make certain types of minor changes without needing to apply for planning permission, but are partly removable by the local planning authority by issuing an Article 4 direction.
Source
Monday, December 1, 2008
Lack of mortgage funding must be addressed
"High octane volatility" in the money markets is making predictions on the future of the housing market more difficult, according to the Council of Mortgage Lenders (CML).
The CML claims the latest development in the banking sector, like the bail-out of HBOS by Lloyds TSB and the collapse of Lehman Brothers, were unexpected and the body said decisions have been made that many would have deemed impossible a few months ago.
With house prices falling, sales plummeting and remortgaging activity low, the CML said the lack of credit available for people wanting to take out a mortgage needs to be addressed immediately.
Source
The CML claims the latest development in the banking sector, like the bail-out of HBOS by Lloyds TSB and the collapse of Lehman Brothers, were unexpected and the body said decisions have been made that many would have deemed impossible a few months ago.
With house prices falling, sales plummeting and remortgaging activity low, the CML said the lack of credit available for people wanting to take out a mortgage needs to be addressed immediately.
Source
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