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Financial Rebirth Through Remortgage
Seldom in ones life do we get a chance to alter the mistakes we made in the past. Remortgage offers a once in a life time opportunity to change from a mortgage to another that is more desirable.
So what are the mistakes that Remortgage will help cure? With the interest rates falling, mortgages taken years ago will appear to be excessively charged. Mortgagors vie for the new rates of interest by taking the new mortgage.
But there is little guarantee that the rate of interest will be constant at this point or will not fall beyond this level. So, mortgagees always have a scope of business by helping people transfer their original mortgage. Thus, remortgages benefit both the borrower and the mortgage provider.
Remortgages are also taken for reasons other than improving interest rate. Many a times people opt for remortgage only to extend the term of repayment. This is more visible in case of interest only mortgages. Interest only mortgages, as we know, require monthly payment of interest on the mortgage and a full and final payment at the end of the term of repayment.
Refinancing the former mortgage will postpone the repayment of the mortgage. The new mortgage will have a new term of repayment. The new mortgage deal pays off the former deal. The borrower could have been at risk of losing his home had he been required to make a prompt repayment at that point of time. Borrowers get time to plan the repayment of the new mortgage deal.
However, we must not ignore the other side of the picture. The borrower is burdened with the debt for an extended period. More is the time involved in the mortgage, more is the interest cost.
Specialized mortgages have a limited benefit period, after which they become more of a burden. First time buyer mortgages for instance, offer discounted rates in the initial few years. After that the first time buyers will have to pay according to the rates prevalent in the mortgage market. By refinancing the first time buyer mortgage, borrowers can escape the high interest rates or unfavourable terms.
Full points to you if you guessed that remortgages function as a debt consolidation tool. In fact these are regularly used in order to settle debts a.k.a mortgages. Remortgage offers a new mortgage through a new lender who agrees to settle all debts through a combined mortgage deal. This may be advantageous for the borrowers since savings generally result in the deal. The entire value of the mortgage remaining along with the interest is paid as an early repayment. The savings are the result of the negotiation process. The more skilled is a person in the negotiation skills, the more will the savings be.
However, some lenders explicitly forbid a remortgage by incorporating a clause to the effect in the terms and conditions. Some mortgagees may freeze the right to remortgage for a certain time period. For instance cash back mortgages where the borrower gets cash at the beginning of the mortgage prohibit outright the right to remortgage for a period. The period may differ with the lenders. This may severely impede the borrowers' freedom to change to a new deal. It will thus be important to closely look for such clauses when signing on the dotted line. Having agreed to the terms once there is no looking back again. May be there is no second chance for a remortgage.
ADITYA THAKUR Aditya has completed his masters in mass communications from Jamia University. If you need UK Personal Loans, secured Loans, unsecured loans visit http://www.ukfinanceworld.co.uk
MORE RESOURCES updated Sun. May / 28 / 2023
Today's Mortgage, Refinance Rates: May 28, 2023 | Rates Spiked Last Week and Remain High - Business Insider
Today's Mortgage, Refinance Rates: May 28, 2023 | Rates Spiked Last Week and Remain High Business Insider
The Great Pandemic Mortgage Refinance Boom - Liberty Street ... Liberty Street Economics -
Compare Today’s Refinance Rates | U.S. U.S News & World Report Money
What is mortgage refinancing and how does it work? Yahoo Finance
Today's Mortgage, Refinance Rates: May 21, 2023 | Rates are Flat for now, but Should Drop Later This Year - Business Insider
Today's Mortgage, Refinance Rates: May 21, 2023 | Rates are Flat for now, but Should Drop Later This Year Business Insider
How to get a low-cost mortgage refinance Yahoo Finance
How to Refinance a Second Home in 2023 Investopedia
Banks to be stuck with 'mortgage prisoners' as those who can refinance their home loan search for a better interest rate - ABC News
Banks to be stuck with 'mortgage prisoners' as those who can refinance their home loan search for a better interest rate ABC News
What Credit Score Is Needed To Refinance a House | Chase Chase News & Stories
Total Household Debt Reaches $17.05 trillion in Q1 2023; Mortgage ... - Federal Reserve Bank of New York
Total Household Debt Reaches $17.05 trillion in Q1 2023; Mortgage ... Federal Reserve Bank of New York
Monthly Mortgage Payments Could Increase Rapidly if the U.S. ... The Motley Fool
Refinancing your mortgage could save you thousands — here are some of the best refinance lenders - CNBC
Refinancing your mortgage could save you thousands — here are some of the best refinance lenders CNBC
How To Remove PMI: A Complete Guide Zing! Blog by Quicken Loans
CFPB: Choosing a Cheaper Mortgage Lender Could Save You ... The Truth About Mortgage
How does mortgage refinancing work? CBS News
Should I Refinance My Mortgage? - Buy Side from WSJ The Wall Street Journal
Here’s how sharply mortgage refinancing has dropped off Yahoo Finance
CFPB Launches Effort to Spur New Opportunities for Homeowners ... - Consumer Financial Protection Bureau
CFPB Launches Effort to Spur New Opportunities for Homeowners ... Consumer Financial Protection Bureau
Today’s 30-year mortgage refinance rates hit lowest levels in 15 days | Oct. 28, 2022 - Fox Business
Analysis | It Will Pay to Wait to Refinance Your UK Mortgage The Washington Post
Small Business Loan Refinance Bankrate.com
Why Older People Can’t Get New Mortgages The New York Times
VA Refinance Rates - Current VA Loan Refinance Rates Today Business Insider
11 Home Refinance Loans For Bad Credit (May 2023) BadCredit.org
Debt-Ceiling Deal Is Close. Recession And Stock-Market Drop May ... Investor's Business Daily
Current 15-Year Refinance Rates Today Business Insider
Refinance Closing: An Overview Zing! Blog by Quicken Loans
7 Refinancing Programs for Seniors Total Mortgage
Compare Current 30-Year Refinance Rates Business Insider
Heloc vs. Cash Out Refinance Credible