Best Self Certified Remortgage Rates
Why Are The Best Self Certified Remortgage Rates So High?
The best self certified remortgage rates are higher than a year ago simply because lenders cannot afford to offer anything cheaper. This is because their lines of credit have been almost severed in the last six months due to the credit crunch. Lenders cannot get hold of money, so they cannot fund cheap mortgages. This means their mortgage products are scarcer and more expensive - and the best self certified remortgage rates have shot up.
Over the last few years, lenders funded their great mortgages like the best self certified remortgage rates by buying credit from around the world. They buy credit in the form of other mortgages. The mortgages, many of which came from the USA, are packaged together as a security. The lender is sure they will receive the repayments from the American mortgages each month, so this package becomes a profit-making commodity. This is then borrowed on again, to create British mortgages. The lender then creates the best self certified remortgage rates possible and sells them to borrowers. The British borrowers pay back their mortgages, the American borrowers pay back theirs and everyone is happy - of course that wasn't the case.
In the UK, the Financial Services Authority makes sure mortgages are sold correctly. The borrower must be able to afford the mortgage and the lender must be sure that deals like best self certified remortgage rates are honest and fair. In the USA there is no such system. Many mortgages, especially self cert mortgages, were mis-sold and as a result homeowners could not keep up repayments. This meant the first secured package of mortgages was worthless, and lenders lost money as they had lent on promises, not real money. So now lenders have less money and less inclination to be risky - and as a result the best self certified remortgage rates have shot up.
So when will it end? When will the best self certified remortgage rates come back down? No one knows just yet - some experts say a few months, others say years. But one thing is for certain - if you are a self cert borrower and need a remortgage now, the best self certified remortgage rates are going to be more expensive and you are going to have to work harder and plan more to make sure that you can handle this more difficult time.
* Council of Mortgage Lenders Repossession Risk Report, August 2008
