| When
someone wants to purchase a home he must first of all apply
for a mortgage.
Unless
a person has an extremely healthy bank balance or daddy has
a lot of money almost everyone needs a mortgage to purchase
his home.
This applies
whether the prospective property buyer is a first time buyer
wanting to get his or her foot on the first rung of the property
ladder or whether it is a homeowner who already owns a property
but wants to purchase another home.
An Englishman's
castle is his home is a true saying and UK citizens really
do want the best home that they can afford.
More accurately
they want a mortgage commensurate with their earnings that
can buy them the best and biggest home that this amount of
mortgage can in fact purchase.
This applies
both to first time buyers and to home movers.
Normally
one's first home is not the home of his or her dreams, and
a first house is really a stepping stone to a better property
later on when income improves.
When people
can afford to move to a better home they normally do when
they earn enough to obtain a large enough mortgage. They are
confident that not only are they moving to a more expensive
property but they are investing money at the same time.
However
during the fist year and a half of the credit crunch property
prices fell and people were loathe to buy a first property
or to move to another property.
The certainty
that a home is a good investment changed.
Remortgaging
involves switching from one mortgage lender to another to
obtain a lower interest rate.
Remortgages
can be used for almost any legitimate reason, including holidays,
weddings, motor home purchase, etc.
A very
common reason for taking out a remortgage is to arrange debt
consolidation which is the consolidating of all debts such
as credit cards, etc. and paying off all the debt with one
much lower payment.
With credit
cards attracting interest rates from 20% up to more than 40%
compared to remortgages at from 1.98%, the savings through
debt consolidation can be tremendous.
Remortgages
decreased in the same dramatic fashion as did mortgages when
house prices fell, as many were no longer eligible for low
remortgage rates as the value of their home fell and their
equity was therefore reduced.
When house
prices started to rise in April 2009, and continued to do
so for seven months in a row, mortgages increased and remortgages
even started to see a revival.
The news
on the property front is that house prices have again fallen
by 10%, and although a slight fall is common during November
and December, the 10% fall is above that normally expected
at that time of year.
It is
to be hoped that the fall will not continue after the start
of 2010, as if property prices continue to fall mortgages
and remortgages are bound to follow.
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