The homeowner loans of remortgages and secured loans are very similar in a number of ways while at the same time there are a number of differences.
The most important connection between a remortgage and a secured loans is that they are both home loans allied to property
Remortgages andare both ways to raise additional funds by borrowing and the sum that can be borrowed is dependent on how much equity there is.
What equity means is the sum that is left when the mortgage balance is taken away from the property value, and that is the equity the applicant has in his property.
If a mortgage stands at 120,000, and the property is worth 220,000, the equity is 100,000.
Until the recent crunch it was possible to achieve a remortgage of 100% of the property value, with the Northern Rock having remortgages and mortgages at 125%.
These days equity has been very much restricted, and there are not many mortgage providers prepared to lend at 90% any more, and the lenders who do make the interest rates expensive at often between 6% to 7% APR.
These 90% LTV rates re very costly when we remember that it is possible to obtain a remortgage or mortgage at less than 2% if the equity in the borrowers property is beteeen 60% to up to 70%.
Secured loans which like their close relative the remortgage depend on property equity have very much stricter equity margins now than they did brfore.
The equity is a maximum these days of 70% for the self employed and 80% for self employed.
There is one secured loan lender who advances homeowner loans at a maximum of 60% for self employed with no accounts who have been trading for at least six months.
The 60% self employed loans are very handy for the poor old self employed who have been unable to get a secured loan or a remortgage over the last three years.
There have been a number of changes to remortgage and secured loans recently, but they can now, as in the past, be used to do or buy just about anything, and they can both still be used as.
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