Hedge your Remortgage : Home mortgage remortgage guide

Hedge your Remortgage
by Michael Sterios

voteWhat a great life it would be if we could predict future interest rates. Imagine being able to wait it out on your remortgage until such a time as interest rates dropped by several percentage points, just as you knew it would. While this scenario is better placed in a science fiction movie there is a way to bet on the future price of home finance and always come up a winner.
The basis of the scheme is to take advantage of the fact that most mortgages allow you to reserve an offer rather than utilise it right away. What this means is that if you are looking to remortgage your home sometime this year and you find a product that seems suitable, you can apply for the home loan and if accepted you do not necessarily need to take up the offer immediately and redeem your old mortgage.

Instead you can leave the offer on the table, so to speak, up to a specified time limit. This time limit will usually be stated in the mortgage offer documents and usually lasts for between three and six months. During this period of time it is possible that interest rates may rise or fall but because you have a formal offer of finance at a fixed point in time your offer will not be affected by any turbulence in the lending marketplace.

Mortgage offers are not legally binding contracts insofar as you are not bound to utilise it. You can, if you like, apply for another home loan with another lender while the offer is still open and go with the new product if it suits you better. While you may be wondering why everyone doesn't do this the answer is in the fact that it can be costly. Each mortgage application will require a separate valuation on the property in question which of course costs money.

However some valuations can be cheaper if they are on the same property and in a short space of time since the original valuation. This means that you can revalue the house in a few months when you are ready to take on the mortgage offer to appease the lender's appetite for knowing how much the property is currently worth. For a relatively small cost you can therefore hold out on the home loan offer and see what happens to interest rates over a few months.

A savvy home owner could therefore obtain an offer to remortgage their home in one month, hold out for a few months, and if interest rates drop discard the original mortgage offer and get a new one by paying another survey fee and applying for a new loan. If interest rates rise or stay the same, however, they can simply take up the offer they received several months ago at the same interest rate it was offered at and save money compared to everybody else who are applying for mortgages at the higher current rates.

By doing this the home owner is effectively hedging their bets and entering into a no-lose situation. The main thing to keep in mind is that a second valuation fee will probably be incurred and if a new product is required there could also be new application and brokerage fees.

3 Reasons why Real Estate Investor Financing is in Trouble : home remortgage refinancing review article 2009

3 Reasons why Real Estate Investor Financing is in Trouble by Simone Hardy
voteIf you are a new or experienced real estate investor seeking financing for your real estate deals, you may run into some trouble. The old addage, "If the deal is right, the money will come" may no longer apply. Because of the housing meltdown lenders have changed the rules and real estate investors seeking to finance their deals will pay the price. Now more than ever, if you are a real estate investor needing to finance your deals in this economy, you need to know what lenders want to keep to themselves because 1) 286 lenders have gone out of business since 2006, 2) Fannie and Freddie have put a cap on the number of properties you can finance,including your mortgage and 3) If you are self-employed you can no longer qualify for loans using stated income.The above reasons make it necessary for you as a real estate investor seeking to finance your deals to have an edge. Yes, you can still partner with others and get the deal done that way, but what if for some reason that may not be able to take place? What will you do? You need to have the edge that insider secrets that real estate investors financing their deals need to know to get the deal done.
Lenders are less likely to make it easier for you as a real estate investor to get the financing you need. Yes they do need to make loans to stay in business, but they are going to make it more difficult to secure these loans. You will have to jump through hoops - their hoops. But if you have inside knowledge, you'll make it easier for you and your team to secure your financing.