Financial Services Authority
Also referred to as the FSA, is the regulating agency for the financial industry. Make certain that any broker or lender you work with is governed by the FSA. This will ensure the validity of your remortgage arrangement.
Fixed Rate Remortgage
A fixed rate remortgage is a loan which has a fixed interest rate and therefore consistent monthly payments over the lifetime of the loan. It is a good fit for a more conservative borrower who is looking for a loan product which will keep the monthly budget more predictable.
Flexible Remortgage
A flexible remortgage is just that, more flexible. It offers more options in regard to repayment types and payment holidays.
Higher Lending Fee
This is one way lenders protect themselves. In the unfortunate occurrence that a borrower defaults on a loan, the lender is not left tossing in the wind. When negotiating your remortgage, watch for excessive lending fees. They should prompt a red flag in your mind.
Interest-Only Remortgages
Perfectly suited for the riskiest of all borrowers is the interest only remortgage. After completing the approval process, only interest will be paid each month for a specific amount of time. At the end of the term, the remaining principal is due in full. This type of loan is not suggested due to the high amount of risk.
LTV
The loan to value, or LTV is a ratio identifying how much the lender will offer compared with the value of the property you are purchasing. For example, if the property being purchased is valued at 100,000 pounds and the lender is prepared to offer you 80,000 pounds toward the purchase, an 80% LTV ratio exists.
Negative Equity
Negative equity is a condition to be avoided at all costs. This is difficult to do because it normally takes place when property values start dropping. Negative equity is when you owe more on the property than the property is worth.
Offset Remortgages
This is a useful tool if you have a substantial amount in savings. It uses the amount in savings to offset the mortgage outstanding balance and reduces the amount of interest which you pay on the loan.
Remortgage
A remortgage is a process which occurs when the current loan on a property is moved to a new lender in order to get a more competitive rate or a product which is more attractive overall.
Remortgage Term
Simply the agreed time frame in which the remortgage will be paid back in full.
Repayment Remortgage
The most common type of remortgage loan out there, it is a repayment type which includes a portion of the principal and interest together.
Stamp Duty
A government tax assigned to property valued at more than 99,999. Normally it is included in the loan amount and is paid by the solicitor responsible for the processing of the loan.
Tracker Remortgages
A very popular type of remortgage, the tracker is tied directly to the Bank of England base rate.
Valuation Report
Always done prior to the approval of any remortgage, it is a report which indicates the value of the property being remortgaged or originally purchased.
Variable Rate Remortgage
A remortgage product which has a variable rate attached to it. The rate varies as market conditions vary. Well suited for a less conservative borrower who wants to purchase a riskier product.
