Secured homeowner loans as well as remortgages are secured products requiring to be secured on property.
Normally the property is the owner occupied home at which the applicant resides although some mortgage and homeowner loan lenders will quite readily offer remortgages and secured loans on a buy to let property owned by the borrower in which there is a tenant staying.
Homeowner loans and remortgages have much in common, but the main difference between them is that a remortgage is a first charge and recorded at the Land Registry as such while a homeowner or secured loan is a second charge recorded on the Land Registry behind the mortgage already secured on the property.
Before the credit cruch homeowner secured loans were common and their rates commenced then at less than 6%.9%.
Since the start of 2007 secured loans have fallen to less than 20% of their level at that time and it is difficult to fully understand the reason for this because although interest rates have certainly risen, these home loans are still available from about 9% making them even now a cheap way for homeowners to borrow.
Secured loans are secured against equity which is the sum left when the mortgage balance is deducted from the value of the property.
Before the recession, loan to values went up to 125% making it possible for a homeowner to borrow up to 25% more than the house was worth, but this has all changed and the maximum LTV for employed applicants is 80% and 70% for the self employed.
This means that if a homeowner requires more than this equity margin a remortgage, which involves totally moving his existing mortgage to another lender, would be the better choice as some mortgage lenders, although not the majority, are still prepared to advance remortgages up to 90% LTV even to those who are self employed, although these days unlike in the past, they are required to provide the mortgage lender with full accounts.
If the priority is a low interest rate remortgages would be better as their rates are the lowest ever at present.The APR of 1.84% is only available at up to 60% LTV.
Sometimes however a secured loan is the better choice, and the main time is when a homowner is tied in with his current mortgage provider and would be required to pay an early selltlement penalty if repaying sooner than agreed.
This penalty is seldom less than 2% of the current balance outstanding and sometimes it is as much as 5%. on a low mortgage of £100,000 would be £2,000 or £5,000.
Therefore which home loan product one chooses depends mainly on the personal circumstances of the individual concerned but both are equally good methods for a homeowner to obtain funds for a multitude of purposes.
Champiion Finance are experts in remortgages and remortgages from the whole of the market.They are also providers of secured loans for all purposes incluging debt onsolidation. All forms of debt advice and debt help is also available to solve all debbt problems. http|://www.championfinance.com/remortgages.htm
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