Am I Better To Apply For A Remortgage Or A Secured Loan?
If a homeowner wants to obtain finance for a number of purposes there are two real options of doing this, and these two ways are either by means of a secured loan or a remortgage.
Both secured loans and remortgages are loans that are secured on the equity on a property, and therefore only people who actually own their property can apply.
Which is preferable depends on several circumstances, and there are occasions depending on personal circumstances when one is preferable to the other.
Secured loans can be the route to go down if a homeowner is tied in with their mortgage. When someone takes out a mortgage they are tied to the particular mortgage product for a specified number of years and if they remortgage during that period there is an early repayment penalty to be paid.
This can cost the homeowner thousands of pounds in charges as the penalty can be from 2% to 5% of the outstanding mortgage balance. If you have a mortgage of say 300,000, the penalty would be from 6,000 to as much as 15,000. Therefore to remortgage in such circumstances would be an act of madness, and a secured loan would be the road to take.
If the additional finance is required in a hurry, yet again the secured loan would be more suitable, as the secured loan can pay out in under three weeks with remortgages taking four weeks or very commonly six weeks to pay out.
On the other hand if speed of payout is not relevant , and there is no tie in period a remortgage could be preferable as remortgages have a lower rate of interest, starting at interest rates of under 2% at present for those with a minimum 60% LTV in their property.
Secured loans at present have interest rates starting at about 9% which is still good, but certainly not as low as the remortgage.
Therefore whether a remortgage or secured loan is better depends on the circumstances of the remortgage or secured loan applicant.
Learn more about secured loans. Stop by Champion Finance’s site where you can find out all about secured loan and what it can do for you.
