Cash Back Remortgage - What Are The Benefits Of A Cash Back Mortgage?

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Remortgaging your home could give your finances the boost that they need, especially if you have debts that you would like to settle or you are planning home improvements. By remortgaging you are using the equity in your home and taking advantage of any price increase your home may have had since you bought it. A remortgage works by allowing a home owner to get another mortgage on the same property but with the option of it being for a larger amount than their previous mortgage. When the remortgage is finalised the first mortgage is paid off and the borrower can do as they choose with the excess money.

One type of remortgage that some people choose is cash back remortgage which gives the borrower a cash lump sum on completion of the remortgage. This lump sum is in addition to the excess money that will be provided by the remortgage and is usually quite small but enough to cover any legal fees that may be incurred during the remortgage process.

House prices in 2009
As the credit crunch bits there have been many reports of property prices falling over the last eighteen months. Many people that took at the most popular two year mortgages have found that now that their mortgage deal have come to an end the home has dropped by as much as 20% in the last two years. With most remortgage deals the lower the loan to value the new mortgage will be the better the remortgage deal is.

Making sure that you provide your new lender or mortgage advisor with an accurate valuation of your home, this is not as difficult as it sounds. Simply check with a property website as to what price people are asking for on similar properties to your own and allow 5% to 10% off the average price to get an average price you can expect a surveyor to value your home at. Alternatively there are many websites that have land registry data on prices homes have actually sold for and that offer auto mated valuations to give you a firmer idea of the true value of your home.

Pros and cons of cash back remortgage
Pros
Any extra money when taking out a remortgage is useful and can pay off the legal fees that will go along with a remortgage. Cash back remortgages are usually accompanied by another remortgage product, such as a discounted rate remortgage or a fixed rate remortgage.

Con
A cash back remortgage could have higher interest rates than other remortgages available. Many cash back remortgages have an early redemption fee which can add extra costs should you wish to change lender. Some lenders charge an application fee for cash back remortgage.

For more information on cash back remortgages you can visit one of the many online mortgage comparison websites and take a look at what is on offer. If you would rather speak to someone you can contact independent mortgage advisors who are fully trained to give you advice and assistance with any aspect of remortgaging your home. There are many mortgage advisors that charge a fee for their services so always make sure you find out if the advisor is independent and not charging you a fee.


About the Author:
Jason Haines is a protection and mortgage advisor at godirect.co.uk, one of the UK's most trusted information site about personal finance. Here you can find details on the best mortgage deals available today and the affordable life and critical illness insurance quotes.



Article Originally Published On: http://www.articlesnatch.com


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