When people think of the terms of secured loans and mortgages, many know a little of the meaning but not all the details.
The first main thing that must be pointed out, is that both of these are home loans for which only those who have bought their property can apply, as they are both two financial products that require to be secured against the asset of a property.
A remortgage means changing from a current mortgage lender to a new one.
You may wonder what the point of changing mortgage lenders is, well the point is to obtain a lower monthly payment, as rates do vary considerably between one provider and the other.
The average person has a mortgage in excess of 100,000, and many homeowners have mortgages of much more than this, with mortgages over one million not being unknown.
Even a slighltly lower rate can grant vast savings every month.
It is sometimes a like for like remortgage that is applied for, and sometimes additional funds are raised.
Secured loans do not interfere with the current mortgage, but they rank after the current mortgage which is known as the first mortgage.
This is the reason for their other name which is a second mortgage. This is exactly what these loans are.
Like remortgages, homeowner loans can be used for the exact same purposes, including being used as debt consolidation loans.
Remortgages come in various types, such as fixed rates, whereby the payment is set at the same for a certain time, of normally between one year up to five years.
The longer the period is fixed, the more expensive the monthly payment is.
However, a fixed rate does at least mean that the homeowner knows fully what his mortgage will cost for a predetermined period.
Tracker rates are also on the market, and these are cheaper than the fixed product, but can, and in fact will rise when the Bank Of England Base Lending Rate increases which it inevitably will.
Secured loans are more expensive than their cousins, being from about 9% at present, while a tracker remortgage rate starts at less than 2%, if the homeowner has equity of 60% or less on his property.
Secured loans take normally about three weeks to complete, as the applicant, by law, must be granted an eight day cooling off period.
The other home loan takes longer, at from anything from a month upwards.
The documentation required for both is the same, and that is, proof of residency, identification for all applicants, the last three months bank statements and proof of income.
Those who are self employed need accounts, or an accountant's certificate, when applying for a remortgage.
Self certs are available for secured loans at restricted loan to value.
It is to be hoped that this information will prove useful to people considering taking out a remortgage or homeowner loan.
Author Resource:
Champion Finance are a long established company in the finance industry having been trading since 1985. Secured loans can be used for almost any purpose and they make excellent consolidation loans. In addition to secured loans, Champiion Finance arrange remortgages and mortgages from the entire market. Debt advice, debt consolidation and all debt solutions are also available.
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