When You Need Debt Consolidation Opt For A Secured Loan Or A Remortgage
There are many unsure about secured loans, remortgages and mortgages, inspite of the fact that many own their own home.
When applying for these products, many are not completely up on the difference between the three, their exact meaning, their interest rates, and if they want to apply for any of them, how much the monthly cost would be and what information they require to supply.
They all belong to the home loan group, but inspite of this, they have a few subtle differences, and the main one of these regards what they are used for.
Mortgages are what most people need when they either want to buy their first home or to move to a different property. The only way around this is if the prospective home buyer has enough money of his own to buy the property without having to borrow, but such people are very few and far between.
For first time buyers, the maximum mortgage currently available is 85% of the property value, and for homeowners wishing to buy another home, lenders will only advance up to 90% at the most.
Remortgages are only a new mortgage arranged with a different mortgage lender, and as such only exisiting homeowners are eligible to apply.
Some people apply for the same sum as their current mortgage, but hope to obtain a lower interest rate or a better deal in general.
On other ocassions, remortgages for larger amounts are applied for to enable the homeowner to get additional money which they can use for numerous purposes such as buying a caravan or motor home, paying for an expensive wedding for their child, and so on.
Remortgages are often used as a means of saving money by debt consolidation which is the method by which credit cards are lumped into one much cheaper repayment.
Both a remortgage and a mortgage are first charges while the third home loan, namely a secured loan, is a second charge that is also secured to the property but ranks behind the mortgage, and that it is why they are also known as second mortgages.
Secured loans can be used for almost anything, in the exact same way as remortgages, and like them can be also used as consolidation loans.
The interest rates for a mortgage and remortgage currently range from less than 2%, and secured loans start at 7.9%.
Whatever loan is appropriate for your needs, the information needed by the lender is always the same, and this comprises of up to date income proof, as well as proof of residency and identifiction for each borrower.
As can be seen, secured loans, mortgages and remortgages are easy to understand as well as being simple to arrange.