subject: Some Facts About Mortgages, Remortgages And Secured Loans. [print this page] There are several types of loans in the group known as home loans and many people are unsure of what they in fact are, their similarities, their differences, etc.
The main home loans in the group are mortgages, remortgages and secured loans which are also commonly called homeowner loans.
What these three home loans all have in common is that they are all three secured on property.
The first of these, namely mortgages, are the loans needed to buy a property. There are very few people who have the where with all to buy a property with ready cash with the average property in the UK costing in the region of 170,000.
There are thousands of different mortgage products in the market and they can be a minefield especially for those buying their first home who are not well versed about these home loans.
There are tracker mortgages, fixd rates, variable rates, offset mortgages, etc.
With so many different products on offer and with interest rates varying greatly between one provider and the other, a person buying for the first time or a home mover would be well advised to seek the services of an experienced whole of the market broker who can provide them with all the options from which they can then make an informed choice.
Remortgages are very similar to a mortgage and as their name suggests they are actually the re doing of a mortgage, and what in fact they are is simply the moving of a mortgage with one lender to a new one.
As such it is not possible to remortgage if there is not a mortgage already in place.
Some lenders have lower interest rates than others and homeowners can save a great deal of money by changing providers.
When this is arranged for the exact same amount it is called a like for like remortgage as no additional money is being sought.
At other times homeowners want to raise additional funds for any number of purposes including buying a car, paying for a holiday or even for major home improvements.
It is a common purpose of remortgages to be used as consolidation loans whereby a home loan of often less than 2%, depending on equity, status, etc., replaces expensive credit cards, personal loans, etc.
A secured loan otherwise homeowner loan does not change a thing about the current mortgage and is a stand alone product.
Secured loans have all the exact same uses as remortgages apart from the fact that a secured loan will never pay off the current mortgage.
Although secured loans have higher rates than remortgages they are the best way to borrow for homeowners who are tied in with their existing provider.
Interest rates for secured loans are from about 9%.
Another occasion when a secured loan would be of benefit is to the self employed who cannot fully prove their income.
They no longer can obtain either a mortgage or a remortgage without accounts, but some secured loan lenders accept less proof such as a self declaration backed up by trade invoices, bank statements, etc.
This is just a brief summary about the three main home loans and it is hoped that the information has been of some help..
by: Liz Moir
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