The facts before your remortgage

Glossary of Terms

These factors are often over looked when considering a remortgage. We have broken them down by definition to help you through the process:

Early Repayment Charges

Early repayment charges apply to most mortgage or remortgage products in the market for example: The lender may offer the homeowner a 3 year fixed-rate mortgage to protect the mortgage repayments against any rise in the interest rate, in return for, the applicants loyalty during the agreed period.

The charges usually a percentage of the amount borrowed reduces in total every year and is only enforceable if the agreement is broken.

Loan to Value (LTV)

The LTV is a calculation used by lenders to determine the amount a homeowner can borrow. It works using the current market value of the property, the amount outstanding on any mortgage and the results of the applicants credit score.

Property Valuations

Unlike an estate agent that would value a property based on décor and fittings, the lender will instruct a surveyor to calculate the net worth based on square footage and comparable sales in the area to provide an average value, not what a potential homebuyer would be willing to pay.

Credit Score

Credit files or the credit score are historical records of an individual’s financial commitments and outgoings. The details of which are available to any lender for the purpose of assessing the suitability of an applicant applying for credit.

The information is stored and processed by an independent company and provides a breakdown of past and existing credit, a record of accounts, the amount outstanding and the ability to meet such commitments.

Would like a copy of your report and what it all means: more information

Adverse Credit

Adverse credit is a term used to describe an applicant’s credit score or credit worthiness to apply for a remortgage and is usually associated with late or missed repayments to lenders or creditors, otherwise known as arrears and defaults or where payment was enforced through legal proceedings which have led to either a CCJ or forced bankruptcy.

Applying for a remortgage with adverse credit: more information