Most people know the terms of secured loans and remortgages without really understanding what in fact they are.
People know that secured loans hve much in common with remortgages, but they know little more than this.
As with everything else in life, the best place to start is at the beginning, and the starting point is to explain that remortgages and secured loans are loans for whom only homeowners are eligible, and this is due to the fact that both a secured loan and a remortgage need an asset on which to be secured, and the asset that applies here is the property of the applicant.
It is in fact the equity on the property that forms the collateral for a secured loan or remortgage, and this is the difference between the mortgage balance on the property and it's value.
Before the credit crisis, you could obtain a remortgage and a secured loan at 25% more than the property was worth.
The maximum secured loan, loan to value now is 85% for employed borrowers and normally 75% for the self employed.
This has improved slightly, and as of this week, one secured loan lender is advancing 80% LTV loans for the self employed.
Those in employment can obtain a homeowner loan at 90% LTV, but the maximum loan is only £15,000.
As to how much you can borrow ,well the fact is that secured loans are available up to £100,000 and a remortgage can be for any amount and depends on the income of the borrower and the equity on his property up to a loan to value of 90% with some mortgage lenders and up to 85% with others
As regards what these homeowner loans can be used for , the truth is that they can be used for almost anything, including paying for a wedding, a holiday, etc. Secured loans and remortgages are a great method of paying for a car. as it means that the purchaser will have cash in hand to make big savings by buying from a private individual or even buying at auction which both allow for about a third to be saved compared to tne price of buying the same vehicle in a garage.
Remortgages and secured loans are also advisable methods of paying for homeimprovements with their rates of 2% and 7.9% respectively which is a fraction of the interest rate of about 25% charged by the company providing the conservatory, kitchen, bathroom, etc.
They are also very useful when used for debt consolidation which rolls all credit card debts, etc. into a single cheaper payment monthly.
It is obvious that homeowners can pay for almost anything with a secured loan or a remortgage.
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