| Remortgage
is a word known to many but not really understood and why it
sounds a good idea is also a mystery to many.
A remortgage
can only be understood if a mortgage is first understood.
When someone
wants to purchase a property in which to live he needs a mortgage
and this is the case whether it is to buy a first home or
a second, third or fourth and so on.
Ther are
few people who have the required money to pay cash for a property,
and as such the majority of people need a mortgage.
An IFA
can offer a greater number of choices than can one single
lender.
When applying
for a mortgage a prospective borrower must provide paper work
to back up his application.The adviser requires proof of income,
ID, proof of residency in the form of utility bills, etc.
It is
better to consult an independent mortgage broker who deals
wit all mortgage products and can provide a much wider options
than one lender possibly can.
Mortgages
always have a tie in period which is normally between one
year and five years, during which there is an early repayment
penalty if the home loan is settled early.
This can
be expensive as the usual penalty is between 2% to 5% of the
balance still out standing.
It costs
a lot to repay a mortggae before the due date, and so it is
a silly thing to do.
Remortgaging
involves changing from one mortgage lender to another.
The Standard
Variable Rate of the current mortgage provider will often
be higher than applying for a remortgage.
The rates
vary enormously from one lender to another and arranging a
remortgage can be very cost effective as remortgage rates
now start from 1.84% and this will make a great saving if
your current rate is 3% or usually more like around the 5%
mark.
As such
the benefit of a remortgage is in the amount of money that
they can save each month and of course what remortgages are
is the moving from one lender to another.
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