Am I Better To Apply For A Remortgage Or A Secured Loan?
There are all sorts of loans both unsecured and secured , but if you are a homeowner it is wise to use your status as such to borrow at great interest rates by means of the home loan products of remortgages and secured loans.
Both secured loans and remortgages are loans that are secured on the equity on a property, and therefore only people who actually own their property can apply.
There are various matters to consider as to which is the better product at any particular time to be considered.
Secured loans can be the route to go down if a homeowner is tied in with their mortgage. When someone takes out a mortgage they are tied to the particular mortgage product for a specified number of years and if they remortgage during that period there is an early repayment penalty to be paid.
This can cost the homeowner thousands of pounds in charges as the penalty can be from 2% to 5% of the outstanding mortgage balance. If you have a mortgage of say 300,000, the penalty would be from 6,000 to as much as 15,000. Therefore to remortgage in such circumstances would be an act of madness, and a secured loan would be the road to take.
If a great bargain of for example of a private sale motor home or similar crops up making you require the loan in a hurry the secured loan is the better choice as it takes half the time of a remortgage to arrange. A remortgage can take up to six weeks, and a secured loan is half that time.
On the other hand if speed of payout is not relevant , and there is no tie in period a remortgage could be preferable as remortgages have a lower rate of interest, starting at interest rates of under 2% at present for those with a minimum 60% LTV in their property.
Secured loan rates now start at around the 9% mark which is good but still more expensive than the remortgage.
As is obvious there are pros and cons with both remortgages and secured loans, and personal circumstances always dictate which is the better choice.
Learn more about secured loans. Stop by Champion Finance’s site where you can find out all about secured loan and what it can do for you.
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Tagged with: Home Loan • homeowner loan • mortgage • mortgages • remortgage • remortgages • secured loan • secured loans
Filed under: Home Loan
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