When Property Prices Fall Remortgages And Mortgages Also Fall
Author: Liz Moir
When someone wants to purchase a home he must first of all apply for a mortgage.Very few people have enough money behind them to purchase a property outright.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.A 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 earings that can buy them the best and biggest home that this amount of mortgage can in fact purchase.It is the same for first time buyers or subsequent buyers.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 invovles switching from one mortgage lender to another to obtain a lower interest rate.A remortgage can also be applied for to raise additional funds for almost any purpose, such as home improvements,to buy a car or a caravan, to pay for a holiday, a wedding etc.A very oommon 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% and this grants huge savings.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.If property prices fall after the start of next year it is a certainty that remortgages and mortgages wii go the same way.
About the Author:
Having been established for more than quarter of a century Champion Finance should be the first choice for anyone considering a secured loan, a mortgage or a remortgage. Debt advice also provided in a helpful and professional manner.Article Source: - When Property Prices Fall Remortgages And Mortgages Also Fall