A Remortgage Before And Since The Credit Crunch
February 5th, 2010 by Bertie ComoSome financial loans are not available to people who rent their homes whether from a local council, housing association or from a private individual, and one such product are remortgages.
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.
Remortgages just like mortgages are secured on property,and naturally this property must be owner occupied.
Because a remortgage is secured on property the applicant must feel sure that he can meet the monthly repayment without any difficulty, the mortgage lender feels secure in the knowledge that repayments will be faithfully made.
Unfortunately due to the the credit crunch and many losing their jobs as a result of it many people have fallen behind from anything from one month to very serious arrears with their mortgage payments.
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 fact that many mortgage payers have fallen behind in their repayments although many through no fault of their own has lead mortgage lenders tighten up on the granting of remortgages.
One of the first of the criteria changes and an important one at that is the fact that there are no longer any self certifying of income when applying for a remortgage.
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.
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