Mortgages , remortgages and secured loans are very close allies one to the other as they are all forms of home loans secured on the equity of a property.
To explain what the word equity is, it is what is left when the mortgage on that home is taken way from the value.
This means that if a homeowner has a home worth 235000 and a mortgage balance of 135,000 the equity would be 100,000.
There are however significant differences between mortgages, remortgages and secured loans, although, as already stated, they are close relatives of each other.
Mortgages are the home loan needed to buy a house.
If a prospective buyer has enough money to cover the purchase price of the property he has set his mind on there is then no need for a mortgage, and the purchaser can pay cash for the property.
Remortgages involve replacing the mortgage that already exists on a property and changing it to another mortgage lender which can simply be to obtain a better interest rate or to fund raise.
Additional remortgage funds can be used for almost any purpose from vehicle purchase to funding home improvements, paying for a wedding or very commonly for debt consolidation.
When homeowners borrow additional money by remortgaging and use it to fund home improvements shopping around with cash in hand will enable him to obtain a good deal.
Secured loans are homeowner loans secured on the property, which like remortgages can be used for almost any purpose, and although more expensive than remortgages, still have low rates of interest from about 9% at present. Like mortgages and remortgages, secured loans are registered at the Land Registry
Want to find out more about remortgages, then visit Champion Finance’s site on how to choose the best remortgage for your needs.
