The bad credit remortgage refers to a mortgage loan for borrowers with bad credit history. The mortgage lenders report the late payments, default payments, and bankruptcy to your credit history. Eventually, the borrowers lower their credit score. The mortgage lenders uses the credit score to give or reject remortgage financing.
Many remortgage shop also specializes on how to repair bad credit rating. Anybody can remove any inaccurate transaction in your credit history. The keyword is inaccurate. Nobody can remove any accurate data on your credit history.
The bad credit remortgage is also known as subprime mortgage loans. The bad credit remortgage is more commonly known on UK, while the subprime mortgage loans is more commonly known on North America (US and Canada).
There are three main reasons to take bad credit remortgage. First, the borrower wants to lower monthly mortgage payment. If the borrower finds a lower interest rate, the borrower can seek to remortgage.
Second, the borrower wants to raise money for personal expenses like vacation, cars, new home, tuition fee, or so. When the borrower accumulated a home equity, the borrower can borrow up to a certain percentage of the home equity.
Third, the borrower can use the raised money to pay off existing debts this is more commonly known as debt consolidation remortgage. The borrower puts their property or real estate as collateral. In return, the mortgage lender may repossess the property or real estate on default of mortgage payment.
Surprisingly, there are now many mortgage lenders who specialize in bad credit remortgage. Remortgage brokers have list of remortgage financing products of mortgage lenders that suits many financial situation. It is now easier and faster than ever to apply for bad credit remortgage. Best of all, the interest rate and mortgage payments is getting lower.
The Remortgage shop offers various mortgage options such as lower interest rate, bi-weekly mortgage, additional mortgage payment, and more. It is a long list of mortgage options. With the right situation, the borrowers save money to pay their mortgage.
Remortgage is a popular term in UK. Basically, Remortgage means mortgage refinancing. Mortgage refinancing is a process to switch from one mortgage to another. It can be on the current mortgage lender, or different mortgage lender. Mainly, the borrower switches mortgage to save money on mortgage.
Mortgage interest rates lift or dive at any given time. To fully see the advantage and disadvantage of switch, the borrowers must take annual percentage rate, mortgage insurance, and mortgage closing costs into consideration. Like any mortgage, remortgage comes with a price such as penalty, discount points, application fee, title search fee, and appraisal fee.
A popular way to remortgage is bi-weekly mortgage payment, or additional mortgage payment. Bi-weekly mortgage is a mortgage option in which the borrower pays every two weeks. The total mortgage principal which is the amount to be paid goes down faster. The idea is to pay the mortgage principal sooner and more times.
Additional mortgage payment is mortgage option in which the borrower pays a certain percentage additional of regular payment without mortgage penalty. The percentage depends on the terms and conditions. With this mortgage option, the total number of years to pay the mortgage cuts short by several years or months.
Nowadays, it is easier to shop for mortgage. There is good quality online remortgage shop. The websites contains many mortgage lenders. And, the mortgage lenders compete for potential customers.
To switch from one mortgage requires tremendous amount of time of self evaluation. The self evaluation involves many aspects of most current financial situation. The borrowers must make sure that the switch is a change for the better. Using the mortgage options to your advantage, the borrowers frees up equity and capital for personal expenses like wedding, vacation, cars, and more.
Private Mortgage Insurance (PMI) helps borrowers with less than twenty percent down payment to receive mortgage financing. Traditionally, mortgage lenders reject any mortgage application with less than twenty percent down payment. It has been proven that borrowers with less then twenty percent down payment are more likely to default on mortgage payment. The PMI protects the mortgage lenders in case of default on mortgage payment.
The mortgage lenders set the borrower with less than twenty percent down payment. In return, the borrowers pay for the PMI premiums. In the past, the borrowers pay the PMI lump sum on the closing. Over the years, the PMI is spread out to the life of the mortgage.
For example, the borrower pays five percent down payment. Then, the mortgage lender closes the mortgage application. In the meantime, the borrower pays the PMI premiums. In the event of mortgage payment default, the mortgage lender receives the fifteen percent that the borrower is suppose to put as down payment.
For a fixed rate less than twenty mortgage years, the borrower pays 0.79% on up to 4.99% down payment, 0.56% on 5% to 9.99% down payment, 0.23% on 10% to 14.99% down payment, and 0.19% on 15% to 19.99% down payment.
For a fixed rate greater than twenty mortgage years, the borrower pays 0.90% on up to 4.99% down payment, 078% on 5% to 9.99% down payment, 0.52% on 10% to 14.99% down payment, and 0.32% on 15% to 19.99% down payment.
For example, the borrower purchases a $200,000 home on a 5% down payment, fixed rate loan, and 30 year mortgage. The borrower pays a PMI premiums of $130 per month ([(0.78% x $200,000) / 12]). You may have to consult your mortgage broker for a complete and current PMI rates.
The mortgage lenders can remove the PMI premium when the home equity reaches over the twenty percent of the original mortgage amount. In the past, the borrowers pay PMI premiums even if the borrower does not really need PMI. Now, the mortgage lenders automatically remove the PMI premiums for any house purchase after July 29, 1999 after the home equity reaches over twenty percent. There are two ways for home equity to reach over twenty percent. First, the fair market value rise over twenty percent. Second, the borrower pays up the mortgage to twenty percent of the original mortgage amount.
PMI helps the borrowers with less than twenty percent down payment to become home owners. The borrowers must evaluate between second mortgage and PMI. Situation defers for each borrower. PMI may be advantageous to another, or vice versa. PMI premiums can be removed, when the home equity reaches past twenty percent of the home value. PMI rates are subject to change. So, you must consult your trusted mortgage broker for the current PMI rates.
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