Advice given on remortgages

Date:Wednesday 21st January 2009
Author: Susanna Kavka

Some frequently-asked questions about remortgages have been answered by an expert.

Writing on Moneywise, Laura Howard addressed a number of common concerns about remortgages.

In the case of a person who took out a mortgage of more than 100 per cent and has entered negative equity, Ms Howard warned that lenders would not handle a debt that is greater than the property to which it is secured, so borrowers would have to remain with existing lenders.

She added that borrowers forced to sell a home in negative equity may have their lenders turn the excess into an unsecured loan and urged people not to let this happen.

Another question was whether someone coming to the end of a fixed-rate deal should remortgage or stay on with the existing lender's standard variable rate.

Ms Howard suggested shopping around and said that while SVRs are expensive, it may be worth staying with one's current lender while waiting for better offers to come about.

Earlier this week, Alliance & Leicester and Legal General released a new remortgage deal available to borrowers with a deposit of 40 per cent or more.