Jan 28 2010
A Remortgage Before And Since The Credit Crunch
Remortgages are financial products that are only available to homeowners , and for which tenants, ie. those who only rent their homes, are not eligible.
A remortgage is when a homeowner takes out a new mortgage with a different lender often to replace the mortgage than he currently has to obtain a lower interest rate.
Remortgages just like mortgages are secured on property,and naturally this property must be owner occupied.
As a direct result of remortgages are secured the mortgage lender is confident that the person applying for the remortgage is secure in his mind that he can comfortably afford the repayments all leads to remortgages being more readily obtainable than unsecured loans.
This fact has not been the case over the last three years, as many have fallen behind with their payments although very reluctantly due to having become victims of the credit crisis.
The fact of homeowners faithfully making their payments each month on time has not been a concrete fact since 2007 due to so many having been made unemployed because of the recession, and have accrued mortgage arrears for the first time in their life.
The situation regarding mortgage arrears is not common as an Englishman’s home is his castle which must be maintained at all costs.
Changes such as the abolition of self certifications of income have been introduced and proof of income is required for both employed and self employed remortgage applicants.
Remortgage and mortgage applicants must also provide the mortgage lender with bank statements covering the three months prior to the remortgage application to check that all financial information.
Other changes because of what has happened in the mortgage and remortgage market is that mortgage lenders now insist on seeing the last three months bank statements to make certain that the applicants outgoings, earnings etc. are exactly as stated on their remortgage application.
Another sign of the times is that when applying for a mortgage or remortgage the applicant must produce his bank statements for the previous three months for the lender to make certain that the repayments are affordable and to make absolutely sure what is being deposited and withdrawn monthly.
These changes should make it less likely that a credit crisis of such dimension will occur again.
Another credit crisis is certainly not something we want to experience.
Learn more about remortgages. Stop by Champion Finance’s site where you can find remortgage for you.