subject: Remortgages And Secured Loans Are Continuing To Improve. [print this page] A remortgage is a new mortgage arranged through a different mortgage lender.
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.
by: Liz Moir
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