It always helps to feel familiar with often used remortgage terms when a homeowner is looking to secure a remortgage deal. It particularly helps when one is trying to understand exactly what lenders are offering and whether or not that remortgage deal will be helpful. Once you become familiar with these terms you will soon understand more easily the lender’s offerings in the remortgage market. You will also be better educated to discuss your remortgage with lenders.
We also offer detailed information on many more of the topics below. Check out the other remortgage informational guides on this site and you can find a more in depth explanation and answer to the most common remortgage questions. We are sure you will find them very helpful.
• Remortgage Quote Calculator or Remortgage Quote Generator – This is a computer program that uses information from numerous sources and generates an average response as to the questions that most homeowners want to know: how much will a remortgage cost. In general, the use of a remortgage quote calculator should not cost a homeowner any fee nor should there be any obligation to do business with the site offering the service. It is a simple service to use with the homeowner supplying only a bit of information such as the amount of the current mortgage outstanding. In return there will be a report that offers up what remortgage deals are being offered as far as interest rates that can be obtained and the expected monthly repayment amount. This is a very helpful tool for a homeowner to utilize and since it is free, it should be part of a homeowners search for the best remortgage deal for their situation.
• Stamp Duty – The stamp duty is the phrase used to describe the amount of tax that is charged to a buyer when they purchase property. Since it is assessed by the government when a property is purchased there is not a stamp duty charged to a homeowner that is refinancing a mortgage. It is only charged when a new property is purchased not when there is a new mortgage deal negotiated.
• Equity – Equity is a term that is often heard when a homeowner is seeking a remortgage. An easy way to understand equity is that it is the amount of the property the homeowner actually owns in the property expressed in monetary value. This monetary amount is determined by taking the amount of the value of the property and then subtracting how much is owed to a lender for the property. The difference is equity. Equity is important when a homeowner seeks a remortgage. The more equity, or value in the property, the homeowner has then the less borrowing that will be needed in the remortgage. This offers better rates for the homeowner. It is also important because the homeowner can also have some of the equity released in a remortgage offering up a lump sum of cash to the homeowner. This cash can be used for any expense the homeowner decides.
• Negative Equity – Negative equity means that the homeowner has no equity built up in a property and actually has a mortgage repayment level that is higher than the value of the home. This occurs when values of properties drop at a faster rate than a homeowner is paying off debt. Only if the homeowner can increase the value of the property or decrease the debt level can equity return to the positive. Owners with negative equity cannot obtain a remortgage.
• Valuations and Surveys – Valuations and surveys are terms that describe the same thing, which is a determination of the value of a property. A valuation will often be required by a lender to determine the value of a home before approving a remortgage. Once a value is determined then the lender can decide how much can be loaned to the homeowner in the remortgage. The valuation is used to determine the equity a homeowner has in a property.
• Conveyancer – A Conveyancer is a lawyer that specializes and has expertise in property law. A Conveyancer is used when there is a transfer of ownership in property or when a loan is obtained on a property. Business transactions that involve property purchasing or contracts on lending for a property can be complicated and so many lenders, homeowners, and home buyers will use a Conveyancer.
• Loan to Value or LTV – The LTV means how much of a loan a lender will give in relation to the value of a property. If a remortgage is listed as 80 per cent LTV then that means the loan can be up to 80 per cent of the property’s value. The lower the LTV level the better the rate of the remortgage since the lender is taking on less risk in lending the money for the property.
If you did not find something you were looking for in this Remortgage Guide, please check our other Guides for more glossary terms.
