A secured loan and a remortgage have many similarities but also just as many differences.
The main similarity between remortgages and a secured loans is that they are both homeowner loans that must be related strongly to property
Remortgages and secured loans are both methods of raising extra money by borrowing and the sum that can be borrowed is dependent on how much equity there is.
To explain equity, what it in fact is is the amount left when the outstanding balance on the mortgage on property is deducted fom what the property is valued at.
On a house worth 280,000, and a mortgage of 180,000, the equity would be 100,000.
Prior to the credit crisis remortgages of up to 100% were available and one lender, namely The Northern Rock, were even prepared to grant a remortgage, as well as a mortgage, at up to 25% more than the property was worth.
There are now only a few mortgage and remortgage lenders advancing as much as 90% LTV products and the rate for them are fairly high at up to or even slightly more than 6%.
These 90% LTV rates re very costly when we remember that it is possible to obtain a remortgage or mortgage at less than 2% if the equity in the borrowers property is beteeen 60% to up to 70%.
Secured loans which like their close relative the remortgage depend on property equity have very much stricter equity margins now than they did brfore.
One homeowner loans provider has a 60% LTV plan for self employed homeowners who have only been in business for a minimum of six months.
There is one secured loan lender who advances homeowner loans at a maximum of 60% for self employed with no accounts who have been trading for at least six months.
The 60% self employed loans are very handy for the poor old self employed who have been unable to get a secured loan or a remortgage over the last three years.
Although secured loans and remortgages have undergone ,any changes in the last couple of years they hav not changed in that they can still be used for almost ny purpose including debt consolidation
Want to find out more about secured loans then visit Champion Finance’s site on how to choose the best remortgage for you.