You must have of secured loans and remortgages, believing them to be another way in which you can borrow money. You must have known the basics of these types of loans, but you don’t really know whether a remortgage or a secured loan is better for you.
The truth is, there are many similarities between remortgages and secured loans, and if you ask which one is better, the answer is: it depends on your own particular situation. One thing that remortgages and secured loans have in common, however, is that they both need an asset to form security for the loan or what is termed “collateral.” And in most cases, the asset required is the property that you own. Take note: most secured loan and remortgage lenders grant their products to homeowners only, or those who have the property to made as collateral for the loan.
The amount of secured loan, given by the lenders varies, depending on the available equity. Equity, as defined, is the sum that remains when the mortgage balance is deducted from the property value. Remortgages, meanwhile, can be for any sum assuming there is sufficient equity. There are, however, some mortgage lenders who give a limit on the maximum amount that they will advance. Many mortgage lenders, banks, for one, will grant remortgages of up to 75% to value when the remortgage is being used for existing loan or debt consolidation.
There are remortgages, however, that reach to up to 90%. Remortgages’ rates vary considerably, with the equity should be present, the rates available from as low as 1.65% at 60% LTV. It is common that some remortgages are taken out with the main purpose of getting a better mortgage deal. This is often the case for those who want to have extra cash for paying for another property or buying a car, for example.
However, you have to take note that a remortgage is a new mortgage could be arranged by a different lender or the same one who previously had a mortgage on. And like all mortgages, remortgages are registered as a first charge. And while secured loans can also be used for whatever reason, like for consolidation loans, they can never replace the existing mortgage you have. Secured loans will stand alone ranking as a second charge.
So, if you are still tied with a mortgage,
between remortgaging and getting a secured loan, the latter would most likely
to be the better alternative. But, it is still best to get the best advice from
a mortgage or secured loan broker who can provide you with information and how
to get a better deal.
