The Differences In Mortgages And Remortgages Pre Credit Crunch And Now.
Mortgages and remortgages along with secured loans are all types of loans that are secured on property. Therefore these financial products are only available to those who own their own home, and are not in rented property..
A mortgage is a form of home loan taken out by either a first time buyer or a home mover to purchase a property.
A mortgage is a home loan product taken out to buy a property.
The amount of mortgage or remortgage that can be raised against a property depends on the amount of equity available on the property itself. Equity is what is left when the mortgage balance is deducted from the actual worth of the property. If a property has a value of 400,000, and the mortgage secured on it is 220,000, the available equity is’0,000.
Before the credit crunch there was availability of 100% mortgages and remortgages with the Northern Rock advancing 125% mortgages which helped towards their downfall.
Many out there may think that the 125% mortgage is back with the announcement a few months ago by the Nationwide that they are advancing 125% mortgages. This is not available to other than existing Nationwide customers trapped in their current property by negative equity who need to buy another place to live.
If there is absolutely no equity in their current house of the value is lower than the mortgage balance the Nationwide are granting these homeowners 125% mortgages.
Remortgages of 95% are available from a handful of mortgage lenders, and there is even a little better availability at 90% LTV. This would mean that based on the previous example of a property worth 300,000, the largest remortgage available would be 285,000 on a 95% plan and 270,000 on a 90% plan.
The most important feature lenders consider now after status is the equity in a property,and interest rates for both mortgages and remortgages are available at 1.98% at a maximum LTV of 60%.
A very important change in the mortgage industry is the fact that true self certifications of income for self employed applicants has all but disappeared and Platform is only one of two remaining mortgage lenders who will even consider self declarations of income although even Platform reserves the right to ask for additional back up proof.
Before the recession many mortgage lenders accepted self certifications of income, and this is in fact caused much of the financial woes, as sub prime mortgages were advanced to those who in reality could never afford to make the repayments.
This were certainly vey lax before, but on the other hand they are perhaps a bit too strict now.
Learn more about rmortgages then vist Champion Finance’s site to ascertain the best choice of remortgage for your needs.
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