Re-mortgages – To “Re” Or Not To “Re”

If you have a mortgage on your home or business property then the recent cut in interest rates by The Bank of England would be welcome news in case you have taken a variable interest mortgage. However, there could be various factors, which could make you have a look towards the remortgage scene.  A remortgage could offer you significant benefits if your property has appreciated dramatically over the last few years. If you need some cash then you could go in for a remortgage. You could go in for a longer term and thus would have to pay lower installments. If your credit rating were quite good, then you would not have any problem in a remortgage on your property. Even if your credit rating has slipped and you are in dire need of money, a remortgage can bail you out. This will offer you a chance to clear off your other debts and in case you have increased the duration of your loan, you would also have to pay smaller installments but over a longer period of time and also with a lot more interest. This move will increase your credit rating and will also give you a chance to clear off your other debts so that you can concentrate on only one loan. Another way to speed up your mortgage payments is to start pre-paying or overpaying your mortgage payments, if your lender does not have a penalty clause. Many lenders now allow borrowers to overpay upto 500 pounds per month while others have set an upper limit of 5000 pounds in a year. You can take advantage of every drop in interest to clear your mortgage by utilizing that extra money to clear your mortgage faster.  The cost of shifting your mortgage should also be considered before making a move. There will be revaluation costs to revalue your property, penalties to be paid to your old lender to exit out early, arrangement fees when you enter into a new arrangement with your new lender and your attorney’s fees to get your documentation done. You will need to add up these fees along with the new interest rate applicable to you and then compare it with what you are presently paying. If you do not have any choice due to cash constraints and if you feel that this remortgage deal will give you some breathing space then go for it, but if there is no noticeable difference between the two then it is better to stick to your existing mortgage.   So, either way, take the advice of a good mortgage broker and your attorney before making any decision. Any hasty move could turn your remortgage into a ‘remorsegage’.

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February 25th, 2008 - Posted in Secured Loans | | 0 Comments

Will The Subprime Crisis Make Remortgages Costlier

Living in UK, you might not be feeling all that threatened by the ongoing subprime crisis, but what you probably do not know is that the subprime crisis is having an adverse affect on financial markets, not only in the United States but also the world over. Banks and lending companies in UK have already started to feel the heat and it will not be long before they too will be forced into writing off millions of pounds in bad credit accounts, just like their counterparts are doing in the US. Many lending companies have already started redefining their lending rules and policies, something that is making it difficult for individuals to open new credit accounts such as remortgages.

Now all this may seem quite scary and it actually is to some extent, but I would still not recommend that you jump of the roof because I believe that there’s still some hope even though the subprime crisis seems to be getting worse with each passing day. So, if all these days you were planning to take out a remortgage, I would recommend that you go ahead with your plans and stop worrying about the adverse affects that the subprime crisis can have on your remortgage deal. The property market in UK might slow down even more in the coming months, but that should not be a cause for concern because remortgages can last as long as 35 years; enough time to guarantee that the subprime crisis and many more like it will be over by then.

You might also be worrying about the possibility of an interest rate hike in the coming years, but if you ask me I won’t have to think twice to tell you that your worries are nothing but creations of your own mind. Interest rates will certainly fluctuate, but you need not worry too much because you can easily manage that by opting for a fixed rate mortgage. In a fixed rate remortgage, you might have to pay more from time to time, but considering the risks brought about by the subprime crisis, I think it is a small price to pay for securing your financial interests.

Costlier or not, I would recommend that you go ahead and apply for a remortgage because it is a fact that remortgages are always beneficial in the long run. Crisis situations such as the subprime are just cyclical macro economic events and you should not treat them as the end of this world. Just take the right decisions today and soon you will be on your path to prosperity.

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February 22nd, 2008 - Posted in Remortgages | | 0 Comments

Why Is There No Other Alternative To Secured Loans

In UK, there is certainly no dearth for finance options and based on your needs you can take your pick from a wide range that includes everything from cash loans to personal loans, unsecured loans, overdrafts, credit card EMI’s and many others. However, if you are someone who always tries to get the best value out of a deal, I will recommend that you look no further than a secured loan. Other finance options too have their respective advantages, but since none of them are as beneficial as a secured loan, I would never recommend those to you. 

For highlighting the benefits of secured loans, I would like to compare them with some of the other options that are available. I will first start with credit cards because it is a fact that amongst the credit options that are available, they are the ones that are most commonly utilized. When you compare the two you can easily notice that interest rates on secured loans is almost always less than that charged on credit cards. This means that if you apply for a secured loan, your overall interest burden will come down automatically, something that you can never have achieved through a credit card. Credit cards work best only when used for small amount credit transactions and although EMI conversion facility is generally available, I won’t recommend that you use it. EMI options are often marketed as free services, but in reality you might be charged astronomical sums in the name of processing charges. All this proves that secured loans are better than credit cards in more ways than one.

Other credit options, mainly unsecured ones such as cash loans and personal loans, also do not match up to the advantages of secured loans because these too attract a much higher rate of interest. Apart from that, they also have a smaller repayment period, usually around 2 to 3 years, which is certainly not enough for repaying large amount loans. In this context, secured loans are certainly better because their repayment period can be as long as 35 years. If you opt for secured loans, you will have plenty of time to repay your debts.

When it comes to high amount loans, there is certainly no other alternative that’s better than secured loans, but since there are just too many secured loan deals available and an equal number of lenders, I would recommend that you go online and contact lenders directly. This will make it easier for you to compare the available secured loans deals and select the one that best suits your needs and requirements.

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February 19th, 2008 - Posted in Secured Loans | | 0 Comments

Why You Shouldn’t Fall For The Freebies While Remortgaging

Offering freebies along with remortgage deals has become a common trend and it seems that remortgage applicants are flocking to none other than those offering the most freebies. Now, there is nothing wrong in getting freebies in return, but the point is that do these people ever realize the meaning of the popular saying – “there are no free lunches in this world”? Quite unlikely because if they had, they would never have opted for freebie deals, most of which attract relatively higher rates of interest and also a wide variety of costs and charges listed only in the fine print.

So, if of late, you too had been drooling over the offered freebies, I would recommend that you exercise a bit more self control and concentrate on finding the truth about the offered freebie deals. Lenders will always try to lure you with irresistible offers such as free property valuation, free loan processing, free loan arrangement and many others but if you are wise enough, you will never sign on the dotted line unless and until you have ascertained all the advantages and disadvantages of a remortgage offer. However, if you are just not able to resist the temptation, what is most likely to happen is that you will end up paying a high price for the so-called freebies, most of which will come in the form of increased interest payments.

It’s not that all freebie schemes are bad, but since most of them are there just to lure new customers, you can never tell for sure whether the freebies will really benefit you or not. So, in case you are still rooting for freebie schemes, I would recommend that you at least have a look at some of the most essential factors such as interest rates, exit charges, prepayment charges, late and missed payment charges etc. The most appropriate thing to do however would be to pick up a non-freebie scheme and use it as a benchmark to compare all the freebie schemes that might be available. This will give you a fair idea about the actual costs of these freebies, based on which you can then take the most appropriate decision.

For comparing and finding the best remortgage deals, I would recommend that you go online, contact lenders directly and request quotes from them. When you have the requisite information, you will easily be able to separate the wheat from the chaff and take the most appropriate remortgage decision. Freebie or no-freebie, you will thus be able to script a better financial future for you and your family.

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February 16th, 2008 - Posted in Remortgages | | 0 Comments

How Your Small Business Can Benefit From Secured Commercial Loans

The bane of all small businesses has always been the lack of sufficient capital and if you are currently experiencing something similar in your entrepreneurial journey, I would recommend that you apply for a secured commercial loan as soon as possible. I am rooting for secured loans because it’s a fact that they are the easiest to get and most importantly, they provide you plenty of time to repay your debts. Since you pledge your home or your business assets as security in a commercial secured loan, all the associated lending risks are taken care of automatically and you are not put through the rigorous system of creditability checks. It means that your secured loan application will be readily accepted even if your business might not be doing all that good right now.

The funds that you get through a commercial secured loan can be used for achieving a wide variety of business objectives such as procuring essential resources such as men and material; buying machinery and equipment; improving existing infrastructure or creating additional ones; starting value-added services etc. You see there is no hard and fast rule obviously because it all depends on what are the most urgent requirements of your business.

What you eventually do will also depend a lot on the actual amount that is sanctioned to you under the commercial secured loan deal. The amount in turn will depend on the value of your pledged assets. The amount that is generally sanctioned is around 80 percent of the value of your pledged assets, but if you need more you can also apply for loans that are around 100 to 125 percent of the value of your pledged assets. However, since doing so will lead to a substantial increase in your monthly instalment amount, it’s recommended that you think twice before opting for such a secured loan deal.

The commercial secured loan market is currently going through a slump, but that should not be a cause for concern because there are still plenty of lenders out there who will be willing to accept your commercial secured loan application. For getting to the best secured loan deals, I would recommend that you contact as many lenders as possible and sign on the dotted line only when you are quite sure that you have found the most appropriate commercial secured loan deal. Interest rates, processing charges, prepayment charges, and late fees are some of the important factors that you need to consider while assessing all the different deals that might be available.

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February 13th, 2008 - Posted in Secured Loans | | 0 Comments