Remortgaging Jargon Buster
Everything about remortgaging can be confusing. From the actual process to the definitions.
So today, we will break down the key words and phrases that go into remortgaging so you’re all caught up if someone you know is going through the process or you’re considering it yourself.
Essentially, this is the process of taking out a new mortgage to replace an existing agreement. This is due to the fact that the current deal has ended or is nearing an end.
An amount for taking out the mortgage by the lender. This is something that may be of interest if your monthly payments will save you money.
A separate fee could be charged by the lender to reserve a new mortgage deal.
Early repayment penalty
Also known as an early exit fee, this is charged to people who overpay on their agreed monthly payments.
Overpayments is when you choose to pay an amount exceeding the agreed monthly mortgage payment.
This can be the case if you receive a lump sum of money via a bonus from work, inheritance etc.
A flexible mortgage agreement which enables you to vary your payments per month on your mortgage.
This allows you to underpay or overpay with falling for penalty fees as well as taking payment holidays.
Standard Variable Rate
A standard interest rate that will be determined by the lender on your mortgage. This can be increased or decreased by the lender however they choose.
Fixed rate mortgage
This is an agreement that has an interest rate that doesn’t fluctuate throughout the mortgage deal.
Hopefully you have a better idea of the terminology used surrounding this topic, so if now is the time you’re looking for a new mortgage deal, you have the jargon covered!
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.