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Solution Mortgages news on bad credit remortgages, poor credit remortgages and for people with arrears & ccj’s. Remortgage news with regards to the adverse credit market and people with sub prime credit.

Friday, February 29, 2008

Key factors to consider when remortgaging

Solution Mortgages has compiled a list of information that you should give serious consideration to when considering a remortgage. Please find these listed below:-

Lending into retirement

If your mortgage period extends into retirement it is your responsibility to ensure that you will still be able to repay the mortgage. Your income is likely to reduce after you retire and you will need to have a plan in place to cover the payments.

You should seek financial advice or get in contact if you are unsure of what your future income will be or are concerned that it may not be sufficient to meet the payments.

Interest only mortgages

If you are taking out an interest only mortgage you must be aware that you are ONLY PAYING THE INTEREST on the loan and NOT ANY OF THE CAPITAL. Therefore if you remain on the interest only mortgage for the duration of the term you will still owe the same amount that you originally borrowed.

You therefore need to make suitable arrangements to repay the mortgage at the end of the term; this could be by way of selling the property, moving onto capital repayment etc. If you require further information on this, please get in contact.

Consolidating unsecured debts

If you are consolidating unsecured debts (credit cards, loans etc) into your mortgage you must be aware that these will now be secured to your property. Failure to keep up with the repayments will result in your property being repossessed. You must also consider that you may end up repaying a higher amount in the long term. If you require further information on this, please get in contact.

Changes to income & expenditure

Make sure you consider any changes that may occur to your personal circumstances. Is there a possibility you may be made redundant etc. Remember it is your responsibility to make your mortgage payments regardless of changes to your circumstances.

Early Repayment Charges

How much will your existing lender charge you for leaving them, make sure you call your lender and check:

Early repayment charge - this is a penalty that will usually expire after a certain period of time, make sure you don’t complete the re-mortgage before this date unless absolutely necessary.

Alternatives

There are alternatives to re-mortgaging and these should be considered if necessary. If you are possibly going to incur a large penalty for switching to another lender then it is worth considering a further advance from your current lender, or a second mortgage on the property from a different lender. If you consider these options you should ensure you are not ‘tied in’ for longer than the main mortgage so that you can re-mortgage without penalties when the penalties expire on your current deal.

Remember


Your home may be repossessed if you do not keep up repayments on your mortgage

If you have any questions regarding the above, please do not hesitate to contact Solution Mortgages on 0845 123 1260 or visit us online at www.solution-mortgages.co.uk