Occassionally a traditional remortgage may not be the most suitable way to raise additional funds and we can assure you that we will investigate all options available to you.

 

WHY NOT REMORTGAGE? The simple answer is that your current mortgage may be on an incentive rate with attaching 'Early Repayment Charges'. This is typical of a large number of mortgage products offered by the majority of mortgage lenders.

 

FOR EXAMPLE; you have taken out a £150,000 mortgage on a fixed rate for 5 years with your current mortgage lender. After 2 years you decide that you would like to raise money for home improvements, or for other personal use.

 

In this instance, it is not cost effective to remortgage your property to another lender because you have 'Early Repayment Charges' attached to your mortgage of say 3% of the amount you originally borrowed. This means that to repay your mortgage lender at this time, you would have to fund the repayment of your outstanding balance, PLUS a further £4,500 to cover the cost of the 'Early Repayment Charges'. This would make any new remortgage more expensive with interest payable on the full mortgage balance throughout the mortgage term.

 

Alternatively, your mortgage lender may offer you the funds you require, but their lending policy may be that you do not have sufficient income. Maybe your partner is no longer working and your income does not fit their criteria. Maybe since taking out your mortgage you have acquired a County Court Judgement (CCJ) for non payment of a utility bill, or Default, maybe you have had late payments on your credit card. This will have an adverse effect on your credit rating and your current lender may not wish to increase their lending to you.

 

If you now have a CCJ or Default, it would not be sensible to move your prime fixed rate mortgage to a new lender as the rate is likely to be somewhat higher as the interest rate will reflect the increase credit risk you represent now that you have a CCJ of Default.

 

In this situation you may be well advised to retain your original mortgage on the incentive rate with that lender and obtain your new additional borrowings from a 'Secured Loan' company who are more flexible in their approach to lending.

 

A 'Secured Loan', otherwise known as a 'Second Charge', may not have such a competitve interest rate, but it may hold the answer to raising additional funds.

 

In simple terms, your existing £150,000 mortgage remains unchanged, saving you from having to pay out £4,500 in 'Early Repayment Charges' and possibly, 'Mortgage Exit Fees'.

 

A 'Mortgage Exit Fee' is an amount charged by your mortgage lender to stamp your deeds evidencing repayment of the debt and to post the deeds to you, or your legal representative. In the case of some mortgage lenders, this fee could be as high as £285, although many mortgage lenders have removed this fee from their charging structure.

 

By leaving your current mortgage loan unchanged, you borrow the additional amount you require from a 'Secured Loan Company' at an agreed rate of interest. You have now saved yourself the cost of the 'Early Repayment Charges' of £4,500 and the cost of the' Mortgage Exit Fee', say £285.

 

REMEMBER, whilst the rate may not be as competitve as a remortgage, you have saved yourself £4,785 in fees by this course of action.

 

SECURED LOAN COMPANIES are generally more flexible in their approach to your financial situation and credit rating, although this may not always be the case depending on the loan company.

 

IN THE FUTURE, when your existing 5 years fixed rate mortgage is free from 'Early Repayment Charges', you may be able to remortgage and consolidate your secured loan and existing mortgage in to one simple remortgage. Whilst you may still have 'Early Repayment Charges' to pay on a secured loan, this would be on a much lower figure and should be relatively easy to re-coup within a new mortgage deal.

 

REMEMBER, Taylor Made Mortgages can arrange your secured loan on your behalf TODAY!