Wednesday, 16 March 2011

What Are Secured Loans And Remortgages?.

By Bryan Veitch


Every so often there are times when a person wants extra money for an array of purposes.

There are umpteenth purposes for requiring loans, and different types of different loans on the market

One of the major aspects that decides what loans are available is whether the loan applicant owns his own property or if he just rents it.

Tenants unfortunately have very limited options as regards means of borrowing , as they are only eligible to apply for unsecured loans as someone who does not own his home has no security to guarantee the loan.

The position regarding tenants has become worse since the recession.

One of the main unsecured loan lenders, was Welcome Finance but Welcome went out of business at the recession..

Loans are still available for homeowners, although even for homeowners loans are more difficult to obtain these days than they were three years.

When homeowners want a loan there is the choice really between secured loans and remortgages.

Whether homeowners are considering secured loans or a remortgage they have much in common in that both are secured on the available equity in the property, and equity is the difference between the mortgage and what the property is valued at.

Secured loans are a stand alone product that do not have anything at all to do with the existing mortgage that is in place.

Secured loans stand on their own and are not tied in any way to the current mortgages

Remortgages are somewhat different as they do take the place of the existing mortgage and it goes with a new provider sometimes without any additional funds being added to the remortgage or extra funds can be obtained

Homeowner can do almost anything with either remortgages or secured loans from all sorts of home improvements such as a porch, holidays, arranging debt consolidation, etc..

Remortgages usually have lower interest rates than secured loans but on the other hand secured loans can be arranged faster. Whether a remortgage or a secured loan is better depends really on which one best suits the borrower.




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