Homeowners often have the need to borrow for a number of reasons, and many know the words secured loans and they have friends who have arranged these loans. One friend took one out to buy a car , and another secured loan was used by a friend to pay for a cruise . Although you know people who have taken out secured loans, many are uncertain what a secured loan actually means.
Secured loans are loans that must have the asset of a property as a guarantee, which means that they are only available to homeowners and non homeowners are not eligible.
Secured loans are secured against the equity on a property, and 100% and 125% loan to values no longer exist..
The best LTV for employed applicants is now 85% while the LTV for the self employed is limited to only 75%
Another very tight LTV plan is available from one secured loan lender at 60% LTV for homeowners who are self employed, and are without proper accounts, and three months bank statements need to be shown.
The interest rates for secured loans these days is around 9%, which, as this is considerably cheaper than the rate of interest for credit cards and most personal loans, makes them very good debt consolidation loans.
Why you can easily purchase big items with secured loans is because their repayments can be spread out over a twenty five year repayment period
Secured loans can be paid back early, and the penalty for this is normally only one month’s interest.
A remortgage has the same usages as secured loans.
One time when a homeowner would be better with a secured loan than a remortgage is when he is in a mortgage deal with a tie in period, when the homeowner would have an early repayment penalty.
No one wants to pay a penalty and particularly when we consider that this can be anything from 2% to 5% of the mortgage balance and would cost thousands and no one wants to pay that kind of money as the purpose of a remortgage is to save money and not to cost money. Therefore when a homeowner is in a tie in period, secured loans would be better option to proceed with.
Stop by Champion Finance’s site where you can find out all about remortgages for you.
categories: secured loans,homeowner loans,refinancing,debt consolidation,mortgage,remortgage,finance
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Tags: Credit Debt Consolidation, Debt Consolidation, finance, homeowner loans, mortgage, refinancing, remortgage, secured loans