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Understanding U.K. Remortgages
Upon conclusion of
the term of a mortgage, you may want to look for a new one. For many
types of borrowers, this can result in better deals. For example,
for a sub-prime borrower who now has equity in their property, it
may make sense to take part in one of these arrangements. This is
called a remortgage.
Remortgages are often used by debtors to get a better interest rate.
The standard variable rate for a loan may be unattractive, and if
there is equity in the property, it might be possible to get a
mortgage with a better rate. This is one of the most common reasons
for a remortgage. Often a sub-prime borrower initially has to incur
horrible interest rates as a result of their risky credit status.
After three years of solid payments on their loan, it might be
possible to get a better interest rate that fits their current
financial status as a safer borrower. This is one of the most common
reasons for remortgage.
For some, remortgaging won't necessarily improve your interest rate.
It depends on market conditions at the time you started the process.
This is something you must personally consider before choosing to
You should take a close look at the standard variable rates of the
new remortgage. Compare and contrast the monthly payments and
interest rates to make sure you are getting the best deal. Early
redemption charges and exit penalties are important to take a look
at as well.
It is probably wise to take an annual look at your mortgage and see
if the market conditions are right for a remortgage. Sometimes they
will be, and sometimes they will not. If you are a sub-prime
borrower, it is probably a good idea to have a long term plan that
includes a remortgage. Your current credit status will also affect
whether or not it is a good idea. In some circumstances it will not
result in a better rate, and in others it will be a much better
deal. In your mortgage plan, consider how remortgages might make
your plan over time cheaper, and keep an eye on the relative rates
Remortgages - probably the largest choice of
Remortgages in the UK!