Pitsmoezen

Everyone is familiar with a mortgage, an industry term for a loan given to allow an individual to purchase a home.  If a mortgage is a loan taken on the value of your home and the promise to pay a monthly rate in the future, a remortgage is attaining a mortgage on your home or property after you have already attained one.

Types of Remortgages

Remortgages come in a variety of arrangements and structures.  The most common is a Standard Variable Rate (SVR). A Standard Variable Rate is a remortgage where the interest floats upon the market rate.  Even under this variable rate, however, the first few months are typically fixed below market to entice you to take on the loan.

The other major type of remortgage is a Fixed Rate Mortgage. Fixed Rate Mortgages differ from SVR’s insofar as the interest rate is determined and remains flat from the beginning.  This type of loan is more dependable, insofar as you know exactly what your payments will be from start to finish, but it is more risky in that you may end up paying too much if rates fall (or too little if they rise).  As a result of this increased risk, banks typically charge a slightly higher rate for fixed rate remortgages.

I think low mortgage rate is definitely everyone’s dream. With the low mortgage rate, the mortgage payment will be cheaper and it can make our burden lighter. On this crisis, lenders are tend to be more selective on the approval, it is because they do not want to out themselves in the risk. To get easy approval and low mortgage rates we are suggested to have at least 600 point credit score with no late payment.  Not only that, we can get lower mortgage rates if we have specific asset like big amount of money on the bank, RV, or boat.

Well, if we must follow those suggestions to get low mortgage rates, then it will be quite difficult for some of us because not all people have assets; especially grand and not all people have more than 600 point credit score. Only wealthy people can follow such suggestion. What about middle classes people or new wed who just start their life?