The Tightening Up Of Underwriting A Remortgage.
View PDF | Print View
by: BertieComo
Total views: 44
Word Count: 397
The reason for this is that a remortgage replaces an already existing mortgage and as a mortgage is the home loan used to buy a house it is obvious that only homeowners can apply for remortgages.
Mortgages are as stated the loan that everyone needs to purchase a property in the first place, remortgages are therefore like mortgages a homeowner product and only that.
As a direct result of remortgages are secured the mortgage lender is confident that the person applying for the remortgage is secure in his mind that he can comfortably afford the repayments all leads to remortgages being more readily obtainable than unsecured loans.
This fact has not been the case over the last three years, as many have fallen behind with their payments although very reluctantly due to having become victims of the credit crisis.
The fact of homeowners faithfully making their payments each month on time has not been a concrete fact since 2007 due to so many having been made unemployed because of the recession, and have accrued mortgage arrears for the first time in their life.
The situation regarding mortgage arrears is not common as an Englishman's home is his castle which must be maintained at all costs.
Remortgages are still available but lenders are stricter at lending than they were in the past due to have their fingers burned with the many defaulting on their mortgage and remortgage payments.
Remortgage and mortgage applicants must also provide the mortgage lender with bank statements covering the three months prior to the remortgage application to check that all financial information.
It was a common practice when applying for a mortgage or remortgage for a person who owned his own business to declare what he earned annually and this was accepted by the mortgage lender as being a true statement of income, and the remortgage or mortgage was granted based on these earnings which often in fact were greatly over stated.
This tightening up should make the possibility of so many people in arrears happening in the future less likely.
If these checks had been made in the past perhaps the credit crunch would not have happened in the first place or at least would have been less severe.
Another credit crisis is certainly not something we want to experience.
About the Author
If you are looking for remortgages please visit Champion Finance's site on how to choose the best remortgage for your needs.
Rating: Not yet rated
