Want to remortgage but are worried about your personal data?

The recent scandal where the personal data of 25 million people went missing is worrying. Lots of companies today want your personal details and very often they don’t need them and shouldn’t be asking for them. This is more common in the mortgage market than almost anywhere else. Mortgage comparison sites ask you to provide your phone number so that a broker can call you back. What’s more concerning is that often you won’t know which company is going to call you back because the website you were using has sold your details to another company (usually the highest bidder) and even they don’t know who they have sold them to! However there are sites that do things properly. A good example of this was quoted recently when a website user said “Found this site very useful and easy to use. It gave me the information I needed without having lots of people keep contacting me by telephone. I work full-time during the day and also have a part-time evening job so finding time to take 'information gathering' telephone calls was not what I wanted but it was amazing how many sites say that it is online and then when you have submitted the form then say 'someone will contact you' and do not provide any useful information online.” If you are concerned about your personal data and don’t want to be called by someone you don’t know, then make sure that you use a real mortgage comparison site – one that actually compares the whole of the mortgage market and let’s you apply for the mortgage there and then. Be wary of sites that are actually just there to make money by selling your details to a broker. You should be able to get a personalised illustration without giving your contact details. Get the right site and not only will your data be secure but you will improve your chance of finding the right deal for your remortgage.

Benefits of Debt consolidation

Experts recommend debt consolidation for recovering control over personal money management. Debt Consolidation refers taking one loan in order to pay out other loans. In such case, you only have a tension of serving one debt consolidation loan and can secure a lower and fixed interest rate. You will save a lot of money and will pay your other loans faster if you are able to get a cheap remortgage or a poor credit remortgage at cheaper rate of interest. Debt consolidation will minimize your hassles of paying so many monthly loans. So, first you have to consolidate all your debts into one debt consolidation loan.

Though it sounds easy to do debt consolidation but there are certain risks and problems involved in it. Debt consolidation too has some negative aspects. As you must have known by time that we take a debt consolidation loan to pay our other loans and it should acquired at a cheaper rate, but getting a cheaper loan or cheap remortgage is very difficult. You should have a good credit score for applying a cheap loan and if you have been declared bankrupt sometime, it’s even worse.

People are finding it more difficult to repay their loans these days. This results in creating a negative credit history and ultimately it decreases one’s credit worthiness. So, if you are facing a difficulty in getting a debt consolidation loan or a cheap mortgage due to your poor credit score, you should take the help of a financial consultant. Robert Watts and Roya Nikkhah report says: “Rising interest rates and large credit card liabilities are driving increasing numbers of consumers to take out controversial loans that put their homes at risk. Five interest rates rises over the past 11 months will leave scores of people unable to meet monthly repayments on credit cards, personal secured loans and car finance deals”.

Lots of people are going for Homeowners Loan and secured personal loans. Secured loans also offer far high borrowing levels than unsecured loans. Another point is that the repayment period with secured loans is far longer than with unsecured loans, it simply means that your monthly repayments will be far lower. Secured loans and secured personal loans are comparatively easily accessible to the people who have a poor credit than a standard, unsecured loan because these secured loans are taken against any asset.

You can consolidate all your other loans into one and can pay back with an ease with a secured loan or a secured personal loan. You are saved of repaying several loans and have to keep only one in mind. Secure loans are very popular and widely available; even you can get a secured loan online too. There are types of secured loans; you can choose the one that suits your needs. One is considered wiser who compares various available deals in many secured loans and then makes a decision based upon it. One should study all about interest rates and other factors before going in for a secured loan.

Tags: Debt consolidation, Debt consolidation loan, Secured Loans, Homeowners Loan, Secured Personal loan, Poor credit remortgage, Cheap remortgage, Remortgages

Financial Terminology: Jargon Buster A - E

A

1. Account holder
The person who has a personal loan account.

2. Advance
The mortgage loan itself is called the advance.

3. APR (Annual Percentage Rate)
An interest rate designed to show you the total annual cost of getting credit. It should include all the interest and charges payable by you as a condition of taking the loan. Where taking Payment Protection Insurance is a condition of taking the loan, this should also be included in the APR. The typical APR is the APR that 66% of customers applying for the providers credit card can expect to get.

4. Applicant
You become an applicant when you complete and submit an application form for a personal loan.

5. Applied or nominal interest rate
The rate used to calculate the interest due on your mortgage.

6. Arrangement fee
The fee payable to the loan provider by you (the applicant) to open the account.

7. Arrears
Mortgage payments which have not been paid and are overdue.


B

1. Bank of England base rate
The Bank of England sets or reviews their interest rate on a monthly basis and this is the main factor influencing interest rates charged by mortgage and other lenders.

2. Buildings insurance
Covers your actual building(bricks and mortar) and is usually required as soon as you exchange contracts on your house.


C

1. Capital
The amount you owe excluding costs and any interest outstanding.

2. Capital and interest mortgage
This is when your monthly payments go to pay off the outstanding mortgage in addition to the interest on the mortgage. At the end of the term you will have no more to pay. Also called a repayment mortgage.

3. Capped rate
This is a mortgage where a maximum interest rate is agreed which the rate cannot go above. This deal lasts for a set period of months or years. Should the variable rate go below the maximum, the pay rate falls with it.

4. Cashback
An amount, either fixed or a percentage of a mortgage, which you can opt to receive when you complete your mortgage. The lender will likely claw back this money through a higher interest rate.

5. Charge-off
The removal of an account from a loan provider's books. When an account is charged off, the loan provider absorbs the outstanding balance as a loss. Charge-off is also referred to as Write-off.

6. Closing administration charge
A final charge made by the lender to cover their administration costs when a mortgage is fully repaid.

7. Completion
This is end of the mortgage process, when the contracts are signed, all questions have been answered and the keys are handed over and the funds transferred. Happy moving!

8. Consumer Credit Act (CCA)
The Act which defines how personal loans may be advertised, and what rules need to be followed by loan providers in the presentation of loan features such as the interest rate and typical APR that are applicable. The Act also covers the information that needs to be available to the consumer such as product terms and conditions.

9. Contents insurance
Insurance that covers your personal belongings

10. Contract
A contract is a binding agreement between two and more parties. In the context of house buying, a contract is signed by both the buyer and the seller and then 'exchanged' between the respective solicitors, at which point the house sale is binding on both sides.

11. Conveyancing
The legal work involved in the sale or purchase of land.

12. Credit Reference Agency (CRA)
An agency that gathers and maintains information on the debts and repayment records of individuals and businesses. CRAs prepare reports that are used by personal loan providers to view an applicant's credit history. There are two such agencies for consumer credit in the UK - Experian and Equifax.

13. Credit scoring
The process by which your credit worthiness is checked. Weights or 'scores' are associated with your personal attributes, such as your income and the time spent at your current address. These 'scores' are added to give a total credit score. Each total credit score is associated with a prediction of how likely a person with that score is to default. The loan provider then checks this score against the minimum required to be accepted for their loan, determining whether they accept you or not.


D

1. Debt consolidation
The process of combining all outstanding debts in one loan account. For example, you may have an existing loan with a balance of £2,500, a credit card balance of £1,000 and a store card balance of £500. These could all be consolidated into one loan of £4,000. The purpose is usually to lower monthly repayments, through either lower interest rates on the new loan, or lower repayments from an extended repayment term, or both.

2. Default
Non-payment of an account according to the terms of the loan agreement. If you are declared in default, your account may be subject to higher interest rate and other charges. Failure to keep up with repayments may result in the fact being registered at the two main consumer credit agencies in the UK- Experian and Equifax. This may reduce your chances of obtaining credit in the future. If the loan is secured against your home, your home may also be at risk.

3. Deferred payment
Delayed payment. Also referred to as a deferred start, this facility allows you to delay the date on which the first repayment is due. The deferred period could be from one to three months, meaning a loan opened on the 1st January may not require repayments to start until 1st April.

4. Deposit
The deposit paid towards the total price of the property, normally payable at exchange of contracts.

5. Direct debit
Apre-authorized debit on the payer's account initiated by the payee. Most loan providers would require you to set up a direct debit to make the monthly repayments on the loan.

6. Discounted rate
This is where the lender makes a guaranteed reduction off the standard variable rate for an agreed period of time. After the period ends, the borrower will go onto the Standard variable rate. often used by loan providers as an added incentive to apply for a loan.

7. Drawdown date
The date when the contracts have been completed and the mortgage starts.


E

1. Early repayment charge (ERC) / Early settlement penalty
The charge payable to some loan providers should the loan be repaid in full before the full term of the loan has expired. For example, an arranged loan over 36 months may incur an ERC if it is repaid after 24 months, or any point before the 36 months has been reached. The average ERC can amount to the equivalent of 2 months interest.

2. Early redemption charges
Redemption is when the borrower pays off the capital and the interest on the mortgage and thus has full rights to the property. Early redemption fees are the charges incurred for paying off the mortgage early, either to buy the house outright or when you re-mortgage. Always ask about these before you take out a mortgage.

3. Endowment
Endowments are life assurance policies with an investment element designed to pay off the outstanding capital on an interest-only mortgage. There are a few types of endowments, such as 'with profits', 'unitised with profits' and 'unit-linked'. in the 1980s, these were sold to customers by salesman who promised that they would be guaranteed to pay off the mortgage at the end of the term. This is not the case, and many endowment holders are having to bump up their premiums.

4. Equity
In housing terminology, equity is the difference between the value of the property and the money owed on the property. So if the property is valued at £200,000 and you owe £150,000 on the mortgage, you have equity of £50,000. If you sold at that moment, you would receive £50,000. Should the value of the home be less than the mortgage outstanding then you are in negative equity. Not to be confused with the stock market use of the word "equity", which is completely different.

5. Exchange of contracts
In England and Wales (not Scotland), the point when both buyer and seller are legally bound to the transaction.