Why Should I Bother To Remortgage?

Reasons to Remortgage and Improve Your Home

Remortgaging can help you to save money every month, and be a good way to get a lump sum of money, instead of taking out a personal loan.

What is a remortgage?

A remortgage is when you take out another mortgage on your home to replace your current loan or to borrow extra money against your property.

Why would you want to remortgage?

You would remortgage a property to either raise or save money:

Raise money

You can raise money by releasing equity in your home and taking out a new mortgage that is larger than your existing one. You could do this to consolidate debts, make home improvements or fund something else in your life.

Save money

You could save money by remortgaging and switching to a cheaper mortgage provider. You will need to check the terms of your contract though to make sure you aren’t charged any early exit fees.

How could you improve your home?

If you can release equity in your property, you can use these funds to improve your home and potentially increase its value. You may be able to build an extension, make repairs or update a property to raise its market worth.

 

This could prove to be a sound investment in the long-term, but we’d advise you seek expert advice before deciding to borrow money against your home.

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What are the risks of remortgaging?

When you remortgage for a larger amount than your property is worth, you are borrowing more money against your home. If you borrow money and do not keep up with the agreed repayments, your home could be at risk.

If you feel you cannot commit to higher repayments than you are already on, we’d advise you consider remortgaging to release equity with caution.

When shouldn’t you remortgage?

You should not remortgage if your existing mortgage debt is small or if your property’s value has dropped. If your repayment charge is large or if you have little/negative equity in your property, we’d also advise you steer clear of remortgaging, as this won’t benefit you in the long run and could put you at a financial detriment.

Get advice today

If you are looking for expert advice on remortgaging your property, contact our team today. We will be happy to help advise you on what you can do to release equity and switch mortgage provider.

We are experts in offering solutions to people with bad credit and can help you if you need a helping hand with your next move. Visit www.clever-mortgages.co.uk today.

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What is the difference between a secured and unsecured loan?

What is the difference between a secured and unsecured loan?

Secured loans

As the name would suggest, a secured loan is one that’s secured against something you own – for example, if you can’t afford to make your mortgage payments or keep to the arranged repayment schedule then you could risk a tarnished credit report or further action.

There are many reasons to select a secured loan over other options such as credit cards. We have gone into these in a little more depth below to give you an overview on their features and benefits, in what situations they could be beneficial and what considerations you should make before progressing with a decision.

Another example of a secured loan could be an equity loan which is simply a second mortgage In this example you would borrow a lump sum from your property and pay the loan back on a monthly repayment schedule over a period of 5 to 15 years.

What are the benefits of a secured loan?

Generally speaking, secured loans will have the option of longer repayment periods than unsecured ones, meaning they might be more affordable for you in terms of monthly payments. They also tend to let you gain access to much lower interest rates than unsecured ones.

Because the loan is guaranteed against something, you can generally get secured loans for larger total loan balance than unsecured loans.

Secured loans are also good if you’ve got a bad credit history – lenders probably won’t be willing to lend to you if you’ve been in a debt solution or have a poor history of paying back unsecured debt, but secured credit may provide the confidence they need.

The loan could be used for a any legal purpose which could also include combining unsecured debt and credit cards within a debt consolidation loan.

Unsecured loans

Unsecured loans are simply ones in which you borrow money and agree to a fixed repayment schedule, but don’t secure the loan against any kind of property. A standard bank loan, for example, would be classed as an unsecured loan.

A payday loan would also fall into this category as you aren’t securing it against anything, but are promising to pay back a large amount of interest relative to what you’ve borrowed from the payday lender. Payday loans may also offer revolving credit accounts which encourages repeated borrowing from the same provider without having to reassess lending criteria or fill in a new full application.

Unsecured credit is likely to be lent on a lower total borrowing limit, a shorter repayment schedule and whilst unsecured loans aren’t directly secured against anything you own, if a borrower defaults it can result in unsecured debt, the consequences of which could mean that your possessions are seized by bailiffs or become secured debts unless you come to an agreement with your lender.

What are the benefits of an Unsecured loan?

Loan providers can lend to more people because you can get one without owning any property, like a house, a car or a recreational vehicle.

If you’ve got an excellent credit score, then the best deals will be available to you at a higher credit limit. The downside to this, of course, is that if you’ve got a poor credit score or credit rating then you’ll probably find it hard to get a good (or fair) deal on an unsecured loan.

Some unsecured loans might give you the possibility of a payment holiday (where you don’t make any repayments) for a few months before you start paying anything back, but these are subject to your potential lenders policies and may not come as standard.

We work closely with over 100 lenders and can find the most suitable solution from over 1,000 products. Your potential lenders can look at a wide variety of personal circumstances, so if you’re looking for secured finance, a mortgage loan or a personal loan, get in touch using our simple enquiry form or give us a call on 0800 197 0504.

Find your best secured loan Deal

Expert secured loan advice, access to 1000+ products with over 100+ lenders and options for bad credit ratings – Enquire with Clever Mortgages today.

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Releasing equity from your home

What is equity release?
Equity release is a way to obtain money quickly by releasing it from the value of your property. You will lose ownership on a proportion of your property but will still be able to live in it. Read on to find out how to release equity in your home and see if it is the right option for you.

What is equity release?

Equity release is a way to obtain money quickly by releasing it from the value of your property. You will lose ownership on a proportion of your property but will still be able to live in it. Read on to find out how to release equity in your home and see if it is the right option for you.

Why should you release equity?

Equity release may be a suitable option for you if you are looking for immediate cash without having to leave your house. It may also be an option to consider if you don’t have many savings and do not intend to leave a large sum of money behind in your will.

We’d advise you speak to a specialist adviser before opting for equity release and make sure you fully understand the details of opting for this mortgage option. The interest rates on an equity release arrangement may be higher than a standard mortgage arrangement, so you should consider all options before agreeing to one.

How does equity release work?

There are a couple of equity release schemes available and you should consider all options carefully before committing to one. One of the following home equity release options may be suitable for you:

A Lifetime Mortgage is aimed at homeowners over 55 years old who are looking to borrow money and remain living in their property. If you choose this option, you will only need to pay your money back when you die or go into full-time care.

A Home Reversion Plan is suitable for people over 65 years old who are looking for a way to raise money. If you opt for this, you will sell your property in return for tax-free cash – between 20% and 60% of its market value – but can continue to live there. You then continue to live in your home as a tenant without paying rent, providing you keep the property well maintained and take out building insurance.

Equity release considerations

There are a few things to consider before opting for an equity release:

  • Your property will not immediately be handed over to your beneficiaries when you die. However, you can protect some of the property’s cash value to use as an inheritance.
  • If your circumstances change after agreeing to an equity release, you may not be able to rely on your property if you need money later on in your retirement for medical emergencies or other events.
  • You may find the benefits you are entitled to change after releasing equity from your home, as this will be viewed as a change in income.

Get advice today

If you are looking to release equity in your property and raise some much-needed cash, call one of our expert advisers today on 0800 197 0504 or visit https://www.clever-mortgages.co.uk/apply-for-a-mortgage/

How to improve your home on a budget

How to improve your home on a budget

One of the first things you’ll probably think of when you hear the words ‘home improvement’ is, surprise surprise, money.

Whilst it’s true that some people splash thousands upon thousands on the latest mod cons, expensive extensions and costly conversions, the majority of people just don’t have wads of cash lying around. This doesn’t, however, mean you can’t make some fantastic home improvements on a budget. Sound good? Here’s a few of them:

• Install some skylights
• Add a fresh coat of paint
• Decorate with a stair runner
• Add some outdoor seating
• Don’t forget the front of your house!

Install some skylights

Do you have an attic room? If so, then skylights should be one of the first ideas on your list. They come in at a total cost of around £1,000, but are still a relatively uncommon renovation and, as such, can add a unique touch to your home. Aside from bringing in much more natural light than a normal window, they look amazing on a clear night and are great for ventilation in the summer too.

Add a fresh coat of paint

Re-painting your rooms is a great way to inject some personality into your home. Sure, it might have seemed a good idea to get clean-looking beige walls everywhere a few years ago, but going for the safe option isn’t necessarily the best one.

Colours like jewel green or deep purple are great choices to make your home seem much more unique, and the best thing about painting is that it’s pretty cheap too. It’s unlikely you’re going to have to spend more than £100 per room to re-paint it, yet painting remains one of the most powerful ways to change the entire character of your home.

Decorate with a stair runner

Stairs are one of the first parts of a home to lose their sheen (especially if you’ve got young children running up and down them all the time) and can spoil the rest of your house’s look if you’re not careful. Fortunately, installing a stair runner not only solves this problem (and is relatively cheap), but looks great too!

Opt for trendy Aztec patterned designs to give your stairs some character, or go ultra-cosy with softer luxurious materials. If you’ve got kids running around the house 24/7, then you’ll be pleased to know you can choose hardwearing materials that still bring a touch of style to your staircase.

Add some outdoor seating

If you’re lucky enough to have a back garden, then you should always make the most of it if you want to improve the value of your home. Aside from basic touches like keeping your grass cut and fending off weeds, adding some outdoor seating is a must if you’ve got the room. Being able to relax outside in privacy and enjoy a drink or a barbecue in the summer is one of life’s greatest pleasures, and you can get very fairly priced outdoor seating and tables if you shop around.

Don’t forget the front of your house!

Your front windows, door, porch, driveway and garden (if you have one) are the first things people see when they look at your home, so why not make a good first impression? If you’re thinking of selling your home in the future, then revamping the front of your house is a sure-fire way to boost your home’s value for a relatively small cost.

Even minor changes like getting a new door, painting your window ledges or adding some outside light features can really make your home stand out amongst the crowd and, potentially, attract a buyer.

If you’re planning to improve your home, whether large-scale changes or lots of smaller changes speak to us now about our range of finance solutions.

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Making home improvements adding value to your home

Making home improvements and adding value to your home

With Easter just around the corner, now is a great time to start planning those home improvements you’ve been waiting to make. With our roads notoriously busy and holidays extremely pricey, the Easter break is the ideal opportunity to roll up your sleeves and get that much-needed DIY done!

The best types of home improvements

There are a number of improvements that can help to increase the value of your house. Looking at similar properties in the local area will give you an idea of what changes you can make and what effect these could have on the value.

Several types of improvements can add extra room space to your house, such as a loft conversion, basement room, extension, cloakroom or shower room.

The more obvious improvements, such as a conservatory and upgrading the kitchen and bathrooms can also add value. But it’s important to look at the cost alongside what extra value might be added.

For any building and electrical work carried out make sure you get all of the correct paperwork including planning permissions and works guarantees to help facilitate any future sale of the property.

Home Improvement Options

A 2017 survey conducted by Which.co.uk showed the top 10 most common home improvements as;

  • Installing a new boiler or central heating system
  • Having a garden make-over
  • Installing double glazing
  • Building an extension
  • Knocking through rooms
  • Fitting solar panels
  • Getting a loft conversion
  • Adding an extra bedroom

Financing your home improvements

 Because major upgrades to your property can cost a lot of money, look at the cost of borrowing and how much you can afford to pay back each month. Two common ways to finance larger-scale improvements are remortgaging or taking out a second loan secured on your home. With interest rates being generally low at the moment, these two options are worth costing out and Clever Mortgages can help find the right deal for you from our comprehensive range of lenders. If you want to get an idea as to how much you could borrow, access our Mortgage Calculator.

If you’re looking to remortgage then check there are no early repayment charges (ERCs) for repaying your current mortgage and taking out a new one with a new lender. These charges are often applied during, and sometimes for a few years beyond, a special offer period. The new mortgage will need to cover this cost and the home improvements, but you’ll need enough equity in the property to do this.

If you have ERCs in force, then a second charge could be the best option as it could can be taken out without affecting your current mortgage. It could also have a different term so you can plan when you want to pay it off.

If you are looking to make some changes to your home and increase its value, either to sell it in the future or for the quality of life, our experts can guide you through the process.

Remortgaging or taking out a second charge may be good solutions for some customers – however, they’re not suitable for everyone. It’s important to consider the long-term costs of raising funds in these ways, which can easily be reviewed with the assistance of an expert mortgage adviser. If you need to borrow a smaller amount of money you may be better off considering an unsecured product.

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The Best Ways To Fund Your Home Improvements

There’s a good chance that once you’re on the property ladder, you will want to put your own stamp on your house by making some home improvements. You might want a new kitchen or build an extension, whatever you want to do, you’ll most likely need to raise some capital in order to do it.

The best ways to fund your home improvements

In order to afford the improvements, or perhaps protect our savings, most of us will have to use some form of borrowing, but it can be difficult to establish the best option for you. The most popular options for funding home improvements are remortgaging or a home improvement second charge secured loan, but you can work out what is the best option for you.

Remortgaging or taking out a loan

There is a multitude of options available when it comes to funding your home improvements, you just need to decide which one is the best for you. It’s important to remember that when it comes to borrowing money against your home, if you don’t keep up the regular repayments, you could lose your home and it’s vital to bear this in mind when considering remortgages or a second mortgage.

Remortgage to fund home improvements

During the process of paying off your mortgage, it’s likely that you will have a substantial amount of equity tied up in the value of your property. A remortgage is a process of taking out another mortgage on your home, to replace your current mortgage or to borrow money against your property.

For example, if your existing mortgage has £150,000 outstanding and you want £20,000 for home improvements, you may be able to find a mortgage lender willing to lend you £170,000 which can be used to pay off the existing mortgage and fund the work on your home. It’s important to remember that in doing so, you would be increasing the amount of borrowing that is secured against your home and you’ll also need to make higher repayments over the full term of your mortgage. How high the repayments of your mortgage will be, is largely dependent on what proportion of your property value the mortgage represents, your Loan to Value (LTV) and other fees associated with remortgaging.

When remortgaging might not be the best option

Remortgaging a property might work well for some, but it may not be the best option for everyone, especially if:

-Your mortgage debt is small
-Your repayment charge is large
-You have little equity in the property
-Your home’s value has dropped

Second charge secured loan

A second charge secured loan is another option available to keep your existing mortgage intact. So rather than approaching your existing lender, you find another lender who is prepared to grant you a second mortgage.

Secured charge loans are aimed at homeowners that are unable to get a personal loan elsewhere due to a non-existent or bad credit rating. Secured loans also work well for homeowners that are looking to borrow significantly more than an unsecured or personal loan. You would need to make repayments on both mortgages at the same time, which may be over a longer period than a personal loan.

Similar to a further advance, this option also involves increasing the amount of borrowing that is secured against your home and the second charge loan may also be offered at a rate that is much higher than of your first charge mortgage, so it’s best to figure out whether you can afford it or not beforehand.

As your home is used as security for the debt, secured loans may allow you to borrow a larger amount of money with a lower interest rate in comparison to unsecured loans. However, lenders do consider secured loans to be a greater risk to borrowers than an ordinary bank loan.

As a mortgage broker, we specialise in finding great deals on mortgages. We can also compare secured loans from our different lenders to provide you with the most suitable loan.

A further advance from your mortgage lender

You could also get a further advance from your mortgage lender by approaching them and asking if they are prepared to lend you more money. You might do this if your existing mortgage deal is a good one, or if you have significant penalties for terminating your existing mortgage. It’s also important to remember that any advance would be secured against your home and you would still need to pay back the extra money. Also, the interest rate you are charged on the additional borrowing could be different to your existing mortgage rate.

Unsecured loan

If you don’t want to secure any additional borrowing against your home, you can take out an unsecured loan. To obtain an unsecured loan you could try approaching a bank or other lenders. These types of loans typically have repayment terms of up to five years and they also have fixed interest rates so it’s easier for you to plan your budget.

Credit card

If the cost of your home improvements isn’t too high, you could consider paying on your credit card. This could be an attractive option if you can obtain a low-interest rate or even a card with a 0% introductory rate. It’s worth noting however that many of these 0% rates are indeed, introductory. It’s important that you make any repayments before the promotional period ends at the rate subsequently increases.

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