Tracker Remortgages - Remortgage, Secured, Buy To Let

If you have owned your current property for a number of years, the chances are that it has risen in value

Therefore, the amount of loan you have against the property is probably lower compared to the value of the property. This means that you could potentially have a large amount of equity in the house that can be released if you choose to re-mortgage.

If you use the re-mortgage process to borrow extra money, the additional funds can be used to pay for a new kitchen, debt consolidation or even paying for a new car. Re-mortgaging has become a very straightforward process and one of the main reasons for re-mortgaging is to also reduce your monthly repayments. The re-mortgage process simply pays off your outstanding mortgage balance with your current lender. You will then borrow either the same amount or larger through your current lender or a new lender depending on who you have chosen as your re-mortgage provider.

Lenders now offer a variety of re-mortgage products and one type is the Tracker Re-Mortgage. This is a mortgage product that focuses on the interest rate available. It is predominantly marketed as a product that will follow any changes made to the Bank of England base rate. Lenders will offer you the facility to opt for an interest rate that is a set percentage above the base rate. This will be agreed prior to the completion of the mortgage. The agreed rate will be subject to change in accordance with any fluctuations of the base rate. This means that tracker rates can go up or down which will impact the amount of your monthly mortgage repayments.

The tracker rates can be for the duration of the mortgage which usually gives you a lower interest rate, however with these types of mortgages may require an arrangement fee which is payable to the lender. Alternatively, tracker rates can be taken out for a limited period, usually a minimum of two years which incurs a slightly higher interest rate than the lifetime tracker rate. Some lenders will also require you to switch back to the variable tracker rate after the fixed period has ended. You may also be required to pay an arrangement fee for the agreed tracker rate. Whichever type of tracker rate is purchased, there may be Early Repayment Charge that the lender will impose on you should you repay the loan earlier than the agreed period. These charges are usually made up of a percentage of the balance that has been repaid or is currently outstanding.

Many lenders are now offering a flexible type of tracker re-mortgage. This type of mortgage gives you the advantage of being able to make monthly overpayments. Therefore, in addition to your monthly payments, you can top them up with extra payments which will reduce your outstanding loan balance much more quickly. They also offer you the chance to take payment holidays should you need to miss a monthly payment due to various circumstances.

The Re-mortgage market has seem massive growth over the past few years and lenders now have the ability to offer very competitive deals This is beneficial to you as it means the interest rates on these mortgages have become lower. It’s worth checking with a number of lenders before you commit yourself to a tracker re-mortgage. Most lenders have internet sites that can be checked to compare lender rates and it’s through the internet that you will also be able to apply to re-mortgage. Lenders remain open to branch and telephone applications, however the majority of lenders are now seeing increasing numbers of online applications.

Along with the re-mortgage product itself, you can also purchase a mortgage protection policy. This works in much the same way as an insurance policy, for a monthly fee you will be entitled to have your monthly mortgage repayments made should you lose your job through not fault of your own or become ill. There are exclusions to this type of policy and all terms and conditions should be read fully before agreeing to purchase the policy.

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