Remortgages Info

There are many reasons why existing mortgage holders would want to re-mortgage their property. This could be to consolidate existing debts, make home improvements, go on holiday or simply to buy a new car.There are, however a number of problems and issues that you will need to consider when you re-mortgage. It is very important that you check your re-mortgage offer to make sure that you are getting a good deal. It is always worth considering the savings you can make with a re-mortgage against the cost and penalties. In many cases, it can sometimes be worth paying these fees for the benefit of a new loan, particularly if the savings are substantial or the redemption penalty fee is small.When applying for a re-mortgage, you will generally find that there are often fees attached with a re-mortgage. These fees would include costs like valuation fees, redemption penalties and legal costs.

Valuation Fees and Costs - Your future mortgage lender may charge you for valuation fees. This is due to the fact that most mortgage lenders will not rely on your original survey when assessing the re-mortgage value of your home. However some lenders may offer free valuations as a way to make their offer more appealing or attractive. They are more likely to attract new customers if they are charging less fees.

Redemption Penalties - This is one of the most important issues you need to consider when re-mortgaging. Any special offers usually only last for a set period of time. During this period you will be severely penalised if you try to switch to another product or mortgage provider, either by selling your house or by re-mortgaging.

Lenders want to make sure that you stay with them until they have made a profit. They do this by charging you extremely high fees if you try and switch to another mortgage lender before they have done.These penalties can be mainly critical for the first year of your mortgage. This is to try and ensure that the costs that the lender endures in setting up the mortgage are always covered, regardless of whether or not you stick with the mortgage. The total redemption penalty charges can be as much as a few thousand pounds. This is normally enough to put most people off the idea of switching mortgage lenders. The duration of the penalty period will vary from different mortgage lenders, although there are a high number of mortgages available that have no early redemption charges at all. You must, therefore ensure that when you are looking at various mortgages, you read the small print as well so that you are fully aware of how much, if any, the redemption penalties are if you were to re-mortgage.

Legal Fees and Administration FeesLegal and administration fees will also apply with most mortgages. As with the valuation report fees, lenders may choose to refund these fees if you agree to use their recommended mortgage loan insurance and legal products.There are a number of people who find it hard to re-mortgage their property due to the fact that they have obtained a bad credit history, CCJs, defaults or have simply become self-employed since they originally mortgaged their home.

People are normally refused a mortgage or a re-mortgage because they may be self-employed without accounts, or because they may have experienced bad credit problems. The interest rates of the mortgages will usually reflect the level of the lender, and the level of collateral available. Some borrowers may need a higher income multiplier beyond the normal income multipliers in order to achieve the required amount of mortgage needed. This could simply be because of the rapid increase in house prices, if there is only one wage earner in the household, it would be very hard to obtain a mortgage for these properties using the normal 3 x method.

There are a number of lenders available that can offer these higher income multipliers, but it is very important that the level of borrowings is not only affordable, but is also sustainable if you were to suffer a loss of income for any reason. This could be as a result of unemployment or reduction in income from overtime, bonuses etc.