| If
you are wondering what the point of moving mortgage lenders,
the straight answer is that there is a great deal of point,
as there are often savings to be made by switching mortgage
lenders.
Interest
rates vary so greatly between one mortgage provider and another
that it is very possible to obtain a lower interest rate which
obviously grants a cheaper monthly repayment.
Before
the recession, the majority of homeowners did in fact remortgage
at the end of every mortgage deal and tie in period, when
early repayment charges would no longer apply.
Sometimes
a homeowner would remortgage for the same amount as his current
mortgage, which was known as a like for like.
Sometimes
remortgages release extra cash that can be used for a vast
array of purposes.
Secured
loans, or homeowner loans, are home loans secured on the equity
of a property, and they, like remortgages had a multitude
of uses, iuncluding doubling as consolidation loans.
Before
the recession, both remortgages and secured loans were probably
the most popular methods of borrowing for homeowners, with
their low interest rate and flexible usages in addition to
the fact that the repayments for both could be spread out
over as long a period as twenty five years.
Remortgages
and secured loans require equity, and when house prices fell
so too did secured loans and remortgages.
Many who
would have wished to, and who would have benefited from one
of these loans, no longer had enough equity to apply, or at
least insufficient equity to obtain a low interest rate.
Therefore
secured loans declined and many homeowners at the end of their
existing mortgage deal were now better off remaining with
their current provider.
The loan
that could have proved to be so beneficial for debt consolidation,
as they struggled to cope with the finaccial burden caused
by the economic climate was denied them.
Not only
were loan to values for these two home loans tightened, but
self declarations of income were abolished for self employed
applicants.
Matters
are now looking better, and more approvals are now being witnessed,
as the LTV has now been increasd from 80% to 85% for secured
loans.
Some mortgage
lenders are now offering remortgages and mortgages at up to
90% LTV.
While
self declaration, better known as self certs., are still outlawed
for mortgages and remortgages, they are once again accepted
by some, although not all, of the homeowner loan lenders.
This is
most welcome news for those self employed who cannot officially
prove their net profit.
There
are two main reasons for this.
The first
being the increase in property prices, with last month seeing
the biggest price rise for over two years.
The underwriting
criteria for secured loans has now been relaxed to some extent.It
had become so strict that many homeowners could not apply
for a secured loan.
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