If a holiday abroad tickles your fancy, you might be interested to learn that the prices have increased dramatically in the last few years. It has been reported that this is due to the rise in fuel prices and so airlines are having to pay more, and of course this is passed on to the customer.
Various holiday companies conducted research two years ago which indicated that the average price of a holiday abroad had increased to almost 3,000 when including the costs of all spending. So many people are now looking to remortgage to pay such high costs and we’ve put together five reasons why this is a good idea.
1. One single affordable regular payment: A remortgage allows you to switch to a mortgage deal with another lender at the same time as borrowing the additional funds. When you have completed on your new mortgage contract you just have one monthly repayment so you won’t be confused by your outgoings, which is what would happen if you used another form of credit to pay for your holiday.
2. It’s so simple! Remortgages are very simple to arrange and you are spoilt for choice with a range of different contracts for choose from including various repayment methods and interest rates.
The lender generally deals with all the paperwork too. All you have to do is complete the application form and send your documentation and they will do the rest.
3. Wider acceptance with remortgages: Remortgages are often more likely to be accepted than other credit such as unsecured loans and credit cards, especially if you are a freelancer or contractor and don’t have any guaranteed income or if you had bad credit.
This is because mortgages have the property as security so there is less risk for the lender to take on. Many lenders give a higher interest rate if you are a higher risk (e.g. if you are a contractor or have CCJs and so on) but you can generally still get a remortgage and borrow more money for your holiday plans.
4. Remortgage cost less: Because remortgages use your property as security for the loan, they are lower risk and so lenders are more open to offering lower interest rates than on unsecured lending such as credit cards.
Because of this lower risk category that remortgages are in, lenders are able to offer lower interest rates which in turn lowers your monthly mortgage repayments to the lender.
5. Longer repayment periods: The longer repayment period means that the repayments are stretched out and so there is less to repay each month so you’ll have more money for the things you want like that luxury holiday!
Marcus Selmon writes for Just Commercial Mortgages the UK’s No1 site for the latest commercial mortgage rates and commercial property finance news.
