Where the world is headed financially is a bit of a mystery. If we take a long and hard look at the trends in the market we can easily surmise that we are in big trouble. Lending institutions several years ago were looking at a boon in the housing market and thought they could “help out” the new homebuyers as well as those looking to remortgage. The lenders thought it was a good idea to offer very low interest rates and payments but nail the homebuyer with a balloon payment at the end of the term. This way of thinking worked until the unforeseen occurred: employment jeopardy. No one could anticipate that there would be a mass exodus in the economy that would find companies releasing hundreds of employees. Now these poor souls were left without a job but left with a large payment they could not afford. Defaulting on the loan was inevitable and the housing market, as a result, plummeted.

If you were one of these people you may sit up nights wondering what will happen next. You may have your hands grasped in prayer hoping and pleading to the powers that be that it will work out just fine. The sad truth is that it probably will not end well unless you take action now. There are no time machines that can take us back 8, 9 or 10 years to rethink the choices we made. Star Trek is still a long way from becoming a reality so there is no so-called “free society” where everyone is a “have” and not a “have not”. If you were given the chance to make those same choices again you would most likely change your mind on nearly all of those choices. Do not lose all hope just yet because, believe it or not, after months of prayer it has dawned upon these lenders that they themselves are in dire straits as if you have noticed banks have been closing branches, mingling with each other or just folding completely. This is a boon for you to correct some of your folly from the past. We call this a 100% remortgage.

Despite being locked into these mortgage loans with lending companies many of us still do not have a full understanding of what a remortgage is, what equity means or even what a negative equity is. These are all important things a homeowner must know in order to survive having a mortgage in these hellish times. So let’s begin with a simple explanation of some important terms you need to know about:

Mortgage

Considering the fact that you have one it would be wise to know what one actually is, right? A mortgage is simply a loan that is paid off over a longer period time with usually a time period of around 25 years. You can usually get a shorter or longer pay back period but then the banks will level you with interest. A mortgage is given based on the cost of your home and can include closing costs and fees as well. They pay for your home and you pay them X amount of money a month with a large, one-time payment being paid to the holding company at the end of the mortgage term.

Remortgage

If your payments are too much and you find yourself not able to handle them then you can remortgage – maybe. Being able to remortgage depends on how much equity you have available in your home. You can do a 100% remortgage or you can take a percentage of the equity. There are times that you can take more than what your home is currently worth on the market but that creates an immediate negative equity. Basically you are transferring a mortgage loan that you currently hold with a new lender.

Equity

This is what your home is worth at the current market value. If you paid £100,000 for your home and you took out a mortgage for that amount then you will have zero equity. As you begin paying your mortgage you begin to gain equity. If your house goes up in value then you begin to earn equity. If you have paid half of your mortgage off and your house is worth more £150,000 now then you have £100,000 in equity and you can borrow that much from your bank in a remortgage. You will want to do this in order to get a better interest rate and lower payments.

Negative Equity

This is the reverse of equity. In the previous example if you have bought a home for £100,000 but you took out a £125,000 mortgage you are in £25,000 negative equity. This is reduced by making payments as most lenders will not remortgage if you are in negative equity.

These are, of course, very basic descriptions of complicated items. Any banker can fully explain all of these (and much more) if you ask or you can research them further on the internet. Right now you want to know about the 100% Remortgage. This mortgage type allows you to borrow 100% of the value of your home. Keep note that some lending institutions can offer you more than 100% of the value but it may take some poking and prodding.

Why 100% Remortgage

I can think of a few reasons why remortgaging at 100% is something you would want to do. Perhaps you are in a position where you have some equity in your home but are fearing the possibility of a down turn in the housing market or you fear losing your job. If either of these does happen then you are up the proverbial creek and you have a broken paddle going against the current – you may get swept away. Remortgaging at 100% can save your credit and save you from having to pay huge monthly payments.

Other borrowers look at the current market trends, are not in jeopardy of losing their homes or entering in to a negative equity situation but still feel they are being taken advantage of. A 100% remortgage can allow these borrows to pay off their current mortgage, shop around for a new one, and smile as they get a lower interest rate and better monthly payments.

You can remortgage with your current lender but many circumstances call for you to find a new lender. Your old lender may not have a rate they are willing to give that another will. It pays to shop around for the best rates from other companies before making the final decision.

Using Your Equity

You are completely free to use your money from your home for whatever you want. Your primary reason for remortgaging is to get a better rate on your loan be it monthly payments or interest rates. Those are not the only reasons though because it is your money! You can use the cash to debt consolidate other bills that may be looming over your head. Maybe you want to increase the equity in your home and you can do this by doing some much needed home improvements (like adding solar paneling, repairing a roof etc.) or maybe you just want to use the new loan to purchase a new car or go on a family vacation. The 100% remortgage plans provide the borrower with an opportunity to borrow large amounts of money and they are available to anyone. Even people with bad credit can use this scheme to improve their position.

Learning More About 100% Remortgage

There are lending institutions that specialize in the 100% remortgage. It is well advised to contact as many of these companies as you can that service your area so you can find a lender with the best deal. Use their advice to gain as much benefit from the loan as possible. You can search online for 100% remortgage information and potential applicants can discover a treasure trove of options including getting a good deal. In many instances it is a lot easier to get a 100% remortgage and get one in a lot less time then when you got your original mortgage on your home. In essence the 100% remortgage allows you to get equity form your home and property so you can more easily deal with the hard times we are all facing.