Tags: remortgages

How To Tackle Your Moutain of Debt in a Hostile and Lacklustre Economy

Posted By : at 11.09 pm

It is just possible that the UK economy might be over the worst of the crisis phase of the recession, but economic output remains painfully stunted. The latest figures from analysts at the National Institute for GDP show a significant slowdown in month on month economic growth. The Institute says the figures showed a “picture of continued weakness in the UK economy”. Budget cuts, spiralling energy bills and rising fuel costs are all creating a heavy burden for the average British homeowner.

Without taking mortgages into account, the average debt in the UK is now pushing £10,000 per household. This figure increases to over £15,000 when unsecured loans are also taken into account.

The charity’s figures also reveal that each day in the UK 1,392 people will be made redundant and a staggering 337 will be adjudicated insolvent or bankrupt.

Figures from the Citizen’s Advice Bureau (CAB) corroborate these findings. The CAB reports that it deals with over 8,000 new debt problems in England and Wales every working day whilst also reporting that the average UK adult’s consumer debt is £4,350 as of March 2011.

A problem for many individuals is that they are paying high rates of interest on these unsecured loans and credit cards. It’s not unusual to pay over 10 per cent on a personal loan and over 15 per cent on a credit card. For homeowners in this position it can often be worth considering the remortgage rates on offer in order to raise extra cash to consolidate these debts.

This choice has the extra strength of allowing all debts to be incorporated into one overall monthly instalment, which makes for much easier budgeting and fewer late penalty fees from credit card companies. It will reduce the clutter of bills, loan repayment letters chasing borrowers for money and could also reduce the overall burden of your monthly debt repayment. If like many of struggling people across the country you have taken a pay cut at work or are finding it hard to cope with the widely publicised rising cost of living, this could be a solution.

This may mean that you’re looking to reduce your monthly repayments until your circumstances and finances improve. Remortgaging to a fixed rate contract would allow you to budget more easily, and remove the stress of how you will repay your debts from month to month.

It is vital to consult a remortgage professional before taking action, because some important calculations would have to be drawn up. It might be wider to pay off the consolidated portion of the debt in a shorter space of time instead of over the entire life of the mortgage. This is something that can easily be achieved through a mortgage that offers the facility for overpayments.

If your particular financial situation is rather poor, there might only be a small number of remortgage rates that you can access, however, there is no reason to lose hope, as there are some high street mortgage lenders who will specialise in offering these types of product.

A remortgage can be a great option if you’re struggling with multiple creditors and lots of loans and credit cards. In the current difficult economic climate, reducing your mortgage repayments as well as repaying debts at high interest rates could be the solution to your financial troubles. It may also allow you to simplify your finances and to make your outgoings easier to control.

Timothy Frodsham writes for JustRemortgages.com one of the UK’s top sites for the latest remortgage rates and best remortgage deals.

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Why Remortgaging Is a Great Tool For Those Consumers Looking To Refinance

Posted By : at 01.02 pm

Remortgages are attractive to homeowners for a range of reasons. One of the most common is to try and lower interest rates which mean that the monthly repayment on the mortgage would also be lower. If you have been on a mortgage with an introductory rate for some time, you may wish to remortgage at the end of your existing deal.

Another reason for a remortgage is to refinance in order to save money on high interest rates on their credit cards and unsecured loans. Remortgages may also be sought if the homeowner has difficulty obtaining a new mortgage for a new property purchase, as the remortgage option is often cheaper and easier to do. But it is important to remember that mortgage lenders is the UK are still wary since the financial crisis.

A remortgage does not just occur when your existing mortgage deal finishes. A homeowner can choose to remortgage at any time. There is no limit or boundary on who can, or when a person can remortgage their home, although some costs may be involved.

Homeowners may opt to remortgage at various times, for example, if a homeowner started a new job and began to earn commission payments each month, they may seek a new mortgage product that allows them to make over-repayments, or that allows a savings account to be offset against their mortgage balance.

It is usually the case that mortgage lenders will add a penalty clause to create additional obstacles for their clients to remortgage and to make sure that they do not lose out on potential profits, if a client decides to terminate their contract before the term of the loan has expired.

Many mortgage lenders attach ‘early repayment charges’ to their mortgage products in order to ensure they don’t lose out financially if borrowers decide to redeem their mortgages early.

As well as costs to your existing lender for ending your mortgage deal there are likely to be costs associated with the new remortgage deal. These can include arrangement fees, valuation fees and conveyancing charges. When deciding whether a remortgage is financially viable it’s important that you take all the costs into consideration.

When equity is built up in your property, remortgaging can often allow you to release that money so that you can improve the property by renovating and redecorating, or adding new features such as a conservatory, refurbishing the kitchen or converting the loft into a new bedroom for guests.

Releasing equity to fund a large one-off purchase is also popular and it can be a low cost way of funding a new car, a wedding or a dream holiday. And, if you have a number of unsecured loans or credit cards then remortgaging can be a good way of simplifying your finances and reducing your monthly outgoings.

It would almost certainly be in the best financial interest of a borrower to consolidate these debts, in order to gain a more reasonable rate of interest. The quickest and easiest way to achieve this is through a remortgage, though the current window of low interest rates is bound to come to an end sooner rather than later.

Timothy Frodsham writes for JustRemortgages.com one of the UK’s top sites for the latest remortgage rates and best remortgage deals.

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An Interest Rate Rise Will Leave 3M People Struggling With Mortgage Repayments, What Can Be Done?

Posted By : at 08.54 am

A looming default crisis in the housing market could be about to happen as the Bank of England contemplates an interest rate rise. The rate has remained the same at 0.5% since June 2009, which is a period of time without precedent. Currently homeowners who have had variable rate mortgages throughout this period and benefited from it will be hardest hit by any rise, as their monthly instalments will increase and this, in such parlous financial times, is a worry for many home owners.

Industry watchdog the Financial Services Authority (FSA), has published guidelines for mortgage affordability. It says, “a mortgage is affordable if its level and terms allow the consumer to meet current and future payment obligations in full, without recourse to further debt relief or rescheduling, avoiding accumulation of arrears while allowing an acceptable level of consumption”.

Recent figures from the Council of Mortgage Lenders (CML) suggest that an increase in interest rates could leave millions of households struggling to meet their mortgage repayments. It found that 2.9 million homeowners would breach the FSA’s published affordability guidelines if interest rates were to rise by 2 per cent.

On top of higher than expected inflation figures, rising fuel bills, increases in home energy costs and wage freezes, many households are struggling to make ends meet. So, increasing numbers of people are researching the best remortgage rates in order to save money and to protect themselves against future interest rate rises.

As more and more concerned homeowners realise the implications of falling into arrears, many look to remortgage on a fixed rate deal. However they have also begun to realise that due to the demand for such contracts, the interest rates and costs of fixed rate deals has increased and are not so cost effective any more.

London & Country’s David Hollingworth said: “Heightened anticipation of a hike in interest rates has led to a rapid shift in fixed rate mortgage pricing. Lender after lender has moved to increase its rates, often on more than one occasion.

Mr Hollingworth also commented that many borrowers have missed out on the very lowest mortgage deals as the demand for fixed rate remortgages increases. However, he also points out that the current remortgage deals are still competitive in historical terms.

Statistics show that since the beginning of 2011, the average interest rate on a fixed rate contact has increase by almost half a percent, seeing significant increases in many homeowners monthly repayments.

As the demand for remortgages increases, lenders look set to continue increasing the cost of fixed rate deals. CML figures showed that remortgage approvals increased by 16 per cent between February and March 2011.

If you’re considering shopping around for the best remortgage rates, now could be the perfect time. As the prospect of interest rate rises intensifies, lenders look set to continue raising the cost of their fixed rate deals. Take advice from a qualified mortgage broker who can help you find the best fixed rate remortgage deal.

Timothy Frodsham writes for JustRemortgages.com one of the UK’s top sites for the latest remortgage rates and best remortgage deals.

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