subject: The Similarities Between A Secured Loan And A Remortgage [print this page] The Similarities Between A Secured Loan And A Remortgage
The majority of people are well aware of the terms, secured loan and remortgages, without being totally of their meaning.Remortgages and secured loans certainly are both form of loans, and what in fact they are are homeowner loans that are secured on the equity of a property which can be commercial, buy to let or more commonly owner occupied residential property.A secured loan and remortgage are very similar in many respects, as they can both be used for many different purposes, including weddings, school or university fees, caravan purchase, home improvements and most frequently for debt consolidation.Debt consolidation involves the combining all debts in credit cards, personal loans, etc. into one single repayment ervery month.With credit cards having interest rates of up to 40% or more, and home improvement loans when arranged by the home improvement company costing on average 25%, it makes financial sense to clear them off with a remortgage or a secured loan, as the former is available at rates of under 2% and the later has rates from 7.9%.They are also cost effective means of carrying out home improvements compared to the high price of obtaining a loan from the company installing your kitchen, bathroom or conservatory etc. By using a secured loan or remortgage for home improvements you can greatly increase the value of your property without the need to spend too much money every month.The main diffrence between a remortgage and secured loan is that the first is a new mortgage with a diffrent lender that pays off the exisiting mortgage on the property. Sometimes homeowners arrange a remortgage for the exact same sum as their current mortgage, and aim simply to obtain a better rate of interest than they already have. Interest rates can vary tremendously bewteen one mortgage lender and another, and as such much can be saved by applying for a better mortgage deal.The second, that is the secured loan, does not alter the current mortgage, but is a second charge registered at the Land Registry behind the mortgage that already exists on the property.There are a number of secured loan plans available, but remortgages abound in their thousands, making it a wise move to consult a whole of the market mortgage broker who can point out all the options available to you, as choosing the wrong mortgage deal could be costly.As with most things in life seeking the sevices of an expert is the best route to follow.
